So this is very easy to re-create and I am glad I stumbled on what was CAUSING this.
Cubase Pro 8.5
Focusrite Saffire Pro 40.
Make a new EMPTY session, add 3 or 4 or even 2 audio tracks. With ASIOGUARD ENABLED and set to low, normal or high I have a WICKED lag when switching between audio tracks and a long period of time before the track I just moved to is monitorable and recordable. Attempting to either mouse click on a track or using up/down arrows on PC keyboard to navigate with ASIOGUARD enabled it can take 5-6 seconds before the track I moved to becomes responsive. The blue windows circle will spin and then FINALLY the audio track will respond and the rec/mon buttons light up.
When I turn OFF ASIOGUARD everything runs absolutely beautifully. I can mouse click or up/down between all of the audio tracks with total speed and instant monitor/record enable. Fast as heck, perfect.
I then turn ASIOGUARD back on and all of the problems outlined above come back. Solution for now of course is to turn off ASIOGUARD completely but this is a really brutal bug and I would have to imagine others have run across this before?.