Seems the master server is getting hammered, thats why most of you cant get in. Our programmers are on it to check wether they can free up resources for that one.
As for laggy LAN servers: no idea, I cant comment unless I have your configs. Is this LAN, WLAN, 10mbit, 100mbit? On LAN we use 25kbytes per second max thru put, but with one user you shouldnt have any lag. Only reason I can imagine is the server not having enough memory?