Windows LAN traffic extremely slow, but internet traffic fine, what gives?

Question

I love the stackoverflow/superuser community, and I'm hoping that you guys can offer some assistance. I'm having a problem that has just appeared and severely worsened over the last week, which is odd to me since nothing has changed in my network layout.

My network is set up as follows (and yes, this is a home network). Cable modem connects directly to a Windows 2003 Server with RRAS/DHCP/DNS - second NIC in that machine connects to a 24port gigabit switch, which is connected to 22 machines and another switch and a wireless router in bridge mode (NAT/DHCP disabled - all NAT/DHCP/DNS on the network is handled by the first machine). Connected to the first and second switches are 31 machines.

The primary box handles anything that I deem to be bandwidth intensive, the idea was that it would get priority over everything going through it, so for example, all torrents/ftp etc run through the first machine. However, starting approximately a week ago, and worsening since - my LAN traffic speeds are severely degraded, but my internet traffic speeds from any machine within the LAN are not affected.

I originally thought the problem was possibly a hard disk or memory somewhere that was messing with the LAN traffic, I chkdsked and memtested each of the 31 machines on the network, and found no hard drive or memory errors. All cabling is good (the 31 machines are hardwired, there are an additional 16 wireless devices).

I can download, to any machine on the network, any file off the internet at acceptable speeds, I can download a 100GB file, or torrent, or anything, at 40-50Mbps with no issues. However, once that file is downloaded, I cannot transfer it within the network to any combination of machines, the speeds within my LAN are below 15Kbps, and regularly drop causing file transfers to fail and start over, they can't complete even on 10MB files.

I'm at a loss, this network setup hasn't had anything added or removed or changed within the last 6 months, and the issue just began to appear a week ago and has progressively worsened.

I'm at my wits end, I've tried testing hardware, I've tried packet sniffing (I thought maybe I was somehow flooding the LAN with ARP requests or something, there's no unusual traffic). The only thing that I have noticed that I have no explanation for and don't know if it's related, if I ping -t from any machine on the network to a random internet location (Google, Yahoo, MSN, Microsoft etc.), I get request timed out randomly (not often though, nothing unusual), however, if I do it to the original Windows Server RRAS/DNS/DHCP box at 192.168.0.1, I also get request timed out about every 10-15 pings, sometimes 3 or 4 in a row. I'm at a loss for why I'm timing out pings within the LAN, but I'm open to suggestions on how to track down this problem.