Chris and Lisa at speakeasy have been mailing me with updates... they tried changing the line and some other things but without any noticable change. Then we thought we were maxing out bandwidth (even though we shouldn't be close to the limit), so I moved the image server back to the old server.... still getting a high packet loss.
The good news though is that speakeasy has a new OC3 in from InterNAP that they are planning on switching over to on Wednesday ... Lisa said she'd try to hook LiveJournal up to it tomorrow if she can.
I'll keep you updated. Things won't really kick ass until both the servers and the network are fast.