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Clients are all processed in a single loop (client 1, client 2, client 3, loop back) and database calls are synchronous so client 1 can be stuck writing to DB and client 1,2,3 all hang on their network process.

I still suggest the issue could be database related or you have a really terrible network (or maybe both). If the database is on a remote server other than what the zone server is running on that potentially is also a problem.