Published App hangs during SQL query on PS 4.0 Server

I have an resource scheduling application that performs SQL queries via the SQL Native Client.  This application is currently running on Windows 2000 Servers with MetaFrame XP.  We have purchased new hardware and have tested the application with Windows 2003 Server Standard 32-bit with MetaFrame Presentation Server 4.0 (rollup pack 4) .   On the application, you select a location resource and then a person resource and the calendar appears showing when the two resources are available next.  Works fine on MF XP.  
On PS 4.0, when you switch from one location to another, a SQL query is performed.  On some instances, the Published App will hang (hour glassed) for anywhere from 30 to 120 seconds.  The only user on the box using the app is me (Still in testing).  When the app is ran directly from the server (thick) it works fine but on some instances it will hang (hour glass) for AT MOST one second, this holds true for both thick and thin on 2000 w/ MF XP.    
At no time do any users on 2000 w/ MF XP experience this problem, connecting to the exact same database, server, on the same network.  
I have tried various Citrix Client versions, I have tried the SQL native client from the SQL 2000 and 2005.   I have rebuilt one server with only Windows, Citrix, hardware drivers, SQL client, and app.  

I'm not sure what else to look at in this case as it is obvious something to do with how Citrix reacts to the SQL query.    Any clues to a fix?
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Cowboys_Fan_87Asked:
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BLipmanCommented:
Since you are still testing, try this, I just had this fix an odd SQL query issue with timeouts.  

http://support.microsoft.com/kb/912222

Just do the netsh part and leave the registry half in case you see a drop in performance.  
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Cowboys_Fan_87Author Commented:
Thanks for your suggestion.  It didn't fix this issue.  

I have spent 4 hours now with Citrix Support and it appears to have something to do with being a Seamless Application, as it works fine when Windowed.   Unfortunately, I can't run it as a windowed app.  I'm looking at CTX101644 and it reads like Chinese Stereo Instructions.   Citrix is dumbfounded as well and will escalate if I can test all of the settings in the Citrix Support document, which is like 2000 different possibilities.

Also, I forgot to mention that the initial app launches the Login app and then pulls up the database.
 
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BLipmanCommented:
There are tons of bugs in todays Seamless Windows sessions (in the past they were not as bad).  If you get anywhere with this please post your results; I would like to know what they tell you to do aside from using a fixed size or percent (both crappy options).  
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Cowboys_Fan_87Author Commented:
While your answer didn't help in this situation, I reward you the points for being the only person who tried to help.  Thanks.
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Cowboys_Fan_87Author Commented:
The problem with this application was that there was a HIPAA log file elsewhere on the disk that had to have Everyone / Full Control as the permissions.   I discovered this by closely monitoring a user using Sysinternals Process Monitor and Process Explorer.  
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