You could try removing the line
127.0.0.1 127.0.0.1
from your HOSTS file.
It is an illegal instruction anyway, but I have know it to cause loops. Does you PHP error file or Apache error file tell you anything useful?
Was this something you added, just before the system slowed down?
ADDITIONAL SUGGESTION:
Also changing these settings has been known to help on Windows systems, you may need to add then to your httpd.conf if they dont already exist.
AcceptFilter http none
AcceptFilter https none