Could be a Khyber thing...it wouldn't be a first but it been going on for months.  I would be just questing and would lock up.  Couple that with gross UMD lag and it was brutal to play.

Last night I hopped on to run raids because Grace commanded it.  FUCK YOU DDO.  Ran VoD, good ole Hordo fell down to the bottom and as soon as he reached the rest of the party, we all simultaneously locked up for a solid 3 minutes.  Couldn't move, couldn't do anything.  Then it happened again in part 4 of Shroud.  We're all beating on Harry, all of a sudden the damage numbers stop and the blades aren't moving in anymore.  It happened to everyone in the group.  Every once in a while I would be tossed up in the air and hovering over Harry like an out of body experience and then back down.  We all died except Hordo (that's how you know lag is bad), but no one got taken to the penalty box.  All of a sudden we all hit the loading screen and are trapped there for another couple minutes.  Then the Recall button doesn't work once we arrive at the penalty box.  I was so fucking enraged.  The same thing happened the other night in a quest.  What the fuck is going on?  I've never experienced anything like that before in all my time in this game, let alone to the entire party.  FIX YOUR FUCKING GAME.

One of the puggers typed in party chat, "Cue the why GW2 is better speech..." 

That's the thing...  these aren't little issues I'm not pissed because an ED doesn't work.  These are massive, game breaking, and fun sucking issues.  They ruin the whole experience.  They are also completely unacknowledged by Turbine.  In all the time I have played game quality has never been this bad.   It's disgusting what they have done and how they are handling it. Honestly, over dozens of MMO's over a dozen years I can only think of a few instances where issues were this bad and most of those were fixed within days or weeks and came with massive "We're sorry" free game time.

Turbine is unable to recreate this "lag" you speak of. Reinstall your os.

Couple things that bother me about this:  1) it isn't happening to everyone, so we get the apologists on the forums saying upgrade (I won't go down that path again, because it makes me have to go "oooooohhhhm" a la Jackie Gleason... beep beep beep beep).  and 2) the major gamus interruptus shit WAITS till you get good an into something (like a half hour/45 minutes or so in) THEN fucking goes apeshit.  It only takes like two of these, and an evening's pretty much ruined.

And yah - it makes it worse when Turbine doesn't say shit - they have to know how unstable this thing's become.  At least acknowledge and lie and say you're working on it when you know you're just letting it die on the vine.

I'm becoming increasingly convinced they've got some sort of arcane party-client syncing code going on under the hood trying to keep folks on the same page there, and it's interfering with the client-server system, because when this latest one crops up, I can keep attacking on a melee till it clears, for instance, and things will be dead by the time the hitching stops, which isn't something you'd likely note if it was a case of the clients not being able to keep up with the server, or the instance itself actually halting. After all, at that point, the server either wouldn't be getting, or wouldn't be processing client commands...

We all got locked up again in every raid we ran.  It wasn't as long as the long ass one that caused a Shroud fail, but got hit with one as I was running across a bridge in Von6.  I was able to haltingly move across so I didn't die, but it caused a base 2 to die.  ()&#@)$(#*  It is so fucking irritating and, like someone else said, it doesn't happen when you first step in and are doing something unimportant, it happens at a succeed or fail moment and that's what makes it frustrating.

Suulo was again having monster aggro issues last night.  Thankfully Grace got what she wanted so I never have to step into that stupid raid ever again.

RAAAAAAAAAAAAAAAAAAAAGE