I doubt the stalls are just File I/O related btw. Obviously a weak HDD compounds the problem but the troubles here likely go deeper.
I'll just say there is a recent thread on tech-artist.org that touches on what I would expect to be the actual cause.
I'd imagine you're correct. Probably I/O overhead interfering with CPU performance due to terrible Jag IPC while streaming/decompressing data on the fly. Probably easy to identify by testing some PC configs with advanced system monitors running on second display to see what's getting hit so hard on the hitching portions.