You have a storage I/O bottle-neck. Your video settings have an indirect effect on this.

The resource monitor doesn't seem to sample quick enough to show it. Here's what's happening:

Since Shat has a LOT of objects to render, it does not keep it all in memory. As you move around, it loads the object details from the hard drive. If it can not grab it from the HD fast enough, you see this as a FPS hit since your videocard has nothing to render.

This is where the hard drive specs come into play. A low seek time, high RPM and large buffer is ideal.

7400RPm 32mb sata drive
I'm assuming you meant 32GB? If this is a 32GB drive, it's probably pretty old, and the seek time is extremely high. I would suggest you upgrade your hard drive. This is why most gaming computers these days come with a RAID 0. It maximizes your read speeds. I'm not sure if you've seen the threads that talk about getting a solid-state disk...but this is why people are moving towards them. They're extremely fast.

Thaumaturgos, I wouldn't bother re-installing keyclone...that's not it. Post your specs.