Yes, I have seen the lag. But the lag I have seen on the server(s) I played are like half a second, 1 second, 2 seconds. But they do not appear everyday.
What you are describing seems to be crippling lag?
Your characters run/walk up to a monster and it freezes for like over 2 seconds? That I never seen before.
Yes, I have seen lag longer than 2 seconds once or twice in my past 16+ years of playing DDO, but it was in a raid with 11 other people.
It was the "Hunt or Hunted" raid in the maze with a faulty Brazilian ISP. That Brazilian player connected then disconnected twice.
After he left the party, the lag was gone and the raid resumed normally. He did say he had like 80% packet loss and was running on a Brazilian ISP.
Granted I live pretty close to the server, but if you are on the continental United States and is using an ISP like Comcast or Verizon FIOS with gigabit connection,
and there are no problems what so ever with your computer, modem, router or network between your router and your ISP;
I really do not see why you would have the lag experience that you described. Lag for a second or two yes, lag for longer than that? No.