I did test the wallet without the hardcoded nodes, to check it wasn't an issue with one of them. But didn't help, so until the marketplace is finished, the wallet will need to wait.
The source is on github, so in the meantime anyone can take a look and if an update to fix is provided more than happy to give a KTK bounty.
Yes, it's non-responsive while it's syncing. So when you initially load it, wait for it sync up and after that it works fine. Make sure you have the conf file from the OP.
Why the fuck is the windows wallet freezing every 3 seconds? This is pathetic.