Server 2003 Performance Issues After Upgrading To VM Version vmx-09

We upgraded to vSphere 5.1 and updated all VM Tools and VM Hardware to vmx-09.

Since then users have been complainnig that the SQL Server that runs on Server 2003 is performing slowly.  The VM has 2 vCPU's and 4GB RAM

The environment is:

3 x ESXi 5.1 hosts full patched

1 x vCenter 5.1.0a (Windows Server 2008 R2)

From a vCenter persepctive the compute resources show the following:

One spike in CPU usage to 87% in the past week

Memory usage is <40%

Disk Latency, we have had a couple of latency spikes up to 54ms but this falls in line with when backups are running at approx 8PM

Network Mbps, again this falls in line with backups as we are using a network based program.

Things start to get strange within Windows itself, I have Task Manager running to check CPU and Memory usage.  I noticed hat CPU was going up to 60% however no processes where causing this to happen.  I then ran sysinternals process explorer and the same results.

I then launched Performance Monitor and again this is showing %Processor occassionally using upto 60% but no information inside of either Task Manager or Process Explorer.

I see the same thing happening from a memory perspective, Task Manager shows PF Usage at 3.71GB which remains stagnant, however Performance Monitor shows that pages are occuring with the maximum being 64.

With this in mind, I was thinking about downgraded to VM hardware version 8, my thought process is as follows:

1. Shut down SQL Server
   
2. Get a good backup
   
3. Remove from inventory
   
4. Create a new VM with hardware version 8
   
5. Add old VMDK's to new VM with hardware version 8
   
6. Power on
   

Any thoughts would be welcome.