FYI, i believe we have found the source of the performance issues.
I have done a trace on what database calls are happening and noticed that phpbb3.2 does database writes at what looks like a much higher rate / intensity than the oldschool phpbb 3.0.x.
Because of this, we hit a IO rate limit with amazon, so we are periodically getting throttled down. The symptoms looked exactly like some kind of DDOS attack early on, because the server and database would perform great for a few hours... then randomly stop responding and/or reboot. This made diagnosis of the problem rather difficult.
Around 3:30-4am PST, i am taking the system offline for about an hour to move the database over to a quicker type.
I think this will do the trick. If it does not, i'm still on the case.
Thanks for being patient with me.. i am determined to make this system as snappy... if not snappier than it was before.