Yes, I'm quite sure it's graphics/cpu related and not network lag. My net connection is thankfully pretty solid.

For reference, I've got an A-X2 5200+ and an ATI 4870, 4 gigs of RAM of which a gig is carved out for SK. This is not a world-beating system in this day and age, but it's more than fast enough for every other game I play.

Does L4D2 slow down when I have hundreds of zombies swarming me? Nope.
Does Portal 2 slow down when I'm warping through gigantic, highly detailed levels? Nope.
Does Torchlight slow down when I'm up to my eyeballs in spiders and skeletons? Nope.
Does Spiral Knights slow down when I'm plumbing the depths of the clockworks? Not unless I'm in IMF, FSC, and occasionally in lockdown.

I think it's an especially damning comparison in the case of torchlight, which is a similar third person clicky dungeon crawler: It manages to put more on screen with more sophisticated visual effects and ambiance without even a trace of the performance problems that plague SK. (My only performance complaint with torchlight is that it takes a mysteriously long time to load new levels)

And yes, I've read the performance tweaking threads. The tweaks they advise are generally aimed at preventing the periodic freezes caused by GC thrashing, which isn't the problem here.

I can understand if IMF has some slowdowns. It's relatively new content with new game elements, and sometimes it just takes time to profile and optimize these things. However, FSC is, what, the oldest boss content in the game? (I dunno, was RJP earlier?) It's really inexcusable that it's been this long and still performs this badly.