I updated to Karmic today and the problem seems to have gone away. I
only tried one file (6.6 GB) in transmission and, while the program
freezes for a couple of minutes while the file space is being allocated,
it recovers and functions normally. Will report back after more
experiments.

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Allocating space for large file results in program hanging with 100% CPU usage
https://bugs.launchpad.net/bugs/507036
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