@Richard.Hein:It can't be a network problem as the box is self contained with no network paths. That is to say it is unconnected to any network. It is a wholly independent development box with everything local.
The problems I am seeing, since updating to update #1, all boil down to file locking problems. I get resources are busy or simple "hung" never returning from "auto checkout" events. Stopping Visual Studio and relaunching the project solves things however it is very annoying.