2 2k8r2 VMs on same host- slow network. different hosts, FAST!

Hi all-

troubleshooting a network performance issue.

2 VMs, patched 2k8r2 4cpu, 4gig, no firewall. e1000 nic.

standard switches, 1 uplink nic (1gig).

Testing with iperf -P 4, I get the following-

2 VMs on different hosts, ~920mb/sec (expected).

the same 2 VMs on the same hosts, ~70mb/sec. (very bad).

these are on the same network on the same standard switch.

network between the hosts is 1gig into a newer cisco switch.

any ideas? I'm running hardware version 8, and ESXi version 5.0.0, 821926. (we are unable to run 5.1 at this time)

thanks