As title states I've noticed severe drops in performance in game, which now runs at (much) less than 5 frame per second while in combat using LOWEST settings.
I have played at max graphics with no lag whatsoever ever since I started joined Spiral Knights mid last year.
First thing I noticed was the load screen upon entering Haven was extremely long, approximately 5+ minutes, whereas my usual load times are well under 5 seconds. (I use a solid state drive for my OS and steam games)
Upon entering Haven I joined a friend in his FSC mission (took ages) and instantly noticed that the game stuttered and that the screen freezed regularly.
I turned the graphics down to low and fiddled with my settings but it made no difference whatsoever until I turned down the resolution to 1024x628 and played in windowed mode. Just when the game finally seemed marginally playable (terrible graphics and tiny resolution, very painful to use, still experienced stutters and freezes during combat, even walking around haven stuttered) I encountered a myriad of strange problems:

REGULAR SCREEN FREEZES AND LONG LOAD TIMES!
During combat, especially with lots of shadowfire on the screen. I noticed my inputs were followed by very twitchy movements from my character, it was as if I was teleporting a few squares every now and then, either backwards, or even sideways. I have noticed some instances of this in the past, when I narrowly walk past a wall, it would seem to me momentarily that I had passed the wall, only to be jerked back and be running stupidly into the wall afterwards, but this was not like that. I was walking in open space.
Often my mouse would also seem to "stick" in place, then teleport suddenly afterwards to where it would have currently been if it had not stuck, and sometimes rapidly twitching when not moving/moving very slowly.
Some of my Polaris shots sometimes seemed to "turn" in their attack path, especially when I spun around rapidly on the spot(with mouse only) and fired rapid shots in random directions. The bullet would traverse in a straight line, then suddenly turn and continue in a straight line after turning, making an "L" shape.
Colors sometimes looked weird, black orbs where they should be a fiery yellow, backgrounds in the clockworks seemed like odd splatters of colors.
Attack indications of the feet of enemies often blinked and disappeared far too quickly, or stayed well after the creature died if it was killed while attacking.
General sluggishness of the game, be it opening menus, waiting for switches to turn after attacking them, talking to vendors, interacting with Auction house.
And more I probably haven't noticed.

My internet connection appears fine, both speedtest.net and pingtest.net reported the same usual results even after multiple tests of each. I have made sure I am running the latest graphics driver from nVidia, and am running the latest java. I've checked my DirectX, that my antivirus isn't being funny (I use ESET), restarting the computer, even going into BIOS and twiddling with some of the options such as disabling my overclock (to increase system stability). Nothing has yet seemed to help.
From what I could conclude, at first glance it appeared to be graphical lag, yet turning down graphics options didn't help. Turning down the resolution and getting better performance suggests to me it is a CPU side problem, yet with my specs I highly doubt that.
I have tried playing other games such as Team Fortress 2 and Battlefield 3. They run perfectly fine, just the same as ever. I even ran RuneScape, another java game, just to test if my java was okay. No hiccups there either.
Even an uninstall through steam and re installation did not work, I even tried a manual delete then another re install. Problems persist.

My system specs are below.
Windows 7 Ultimate 64 bit.
Cpu and cooler: Intel i5 2500k overclocked @4.5ghtz. ThermalTake Frio air cooling.
Mainboard: Asrock Z68m
GPU: Asus 1GB GTX560 PCI-E VGA Card. Stock settings.
RAM: 2x 4gb (8gb ram kit) DDR3 1600 G.Skill Ripjaws in dual channel.
Storage: Intel 320 SSD 160 gb with operating system and games, and 1 TB Seagate HDD for storage (Slave drive)
PSU: 1000 watts

It occurs to me that it could possibly be the fact I run the game from an SSD. Perhaps the drive may not have written the game data in correctly from the patch? I am aware of the rapid degradation issue that comes with SSDs but it is still only a 2 month old drive and I have had no issues with it. I have also been running this overclock for over 3 months and it has passed every stability test I've thrown at it, be it week-long stress testing and everyday use.

Frankly I am absolutely puzzled, and I apologize for what has accidentally turned into a very long post! However if this problem can not be fixed a couple hundred dollars of my money has completely gone to waste, every CE payment I have made since I have started playing will now be unusable.

Are there any known compatibility issues with Spiral Knights at this current time? And if so, is a fix on it's way/Can it be fixed?
If it is a problem on my end PLEASE offer any advice possible. I am hoping this can all be resolved by a simple fix I have overlooked, or in a future patch. Possibly reverting the change to the prior patch if the issues are widespread enough?