Server Crashing downloading terrain

Downloading the terrain is very slow / not working. If it does work, lag is very bad until the server crashes. In Task Manager CPU is spiked at 100%; RAM at 50%. This started on 6/28/13. We tried deleting old worlds to free up server space....it didn't work?

What I expected to happen was...:
Load faster and allow for playing with no lag.

What actually happened was...:
Frozen screen / locked up.

Steps to Reproduce:
1. Launched Magic Launcher v1.1.5
2. Selected 'Single Player'
3. Selected a world and then it is very slow / hangs up