>    We see exactly the same problem on two diff. Windows PCs, 
> but I'll give ImDisk a bash in the morning for the sake of 
> experimentation.

Have you tried Process Explorer? Look at the stack trace of one of the
events when it's started slowing down. Make sure the symbol server is
configured. That can be very helpful...

Nothing funny with NTFS ACLs? Is the ACL it's inheriting sensible?
Trying on a FAT virtual disk would help rule that out.

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