> Using edebug I found the slowdown occurs when insert-file-contents is
> called in find-file-noselect-1.  I don't know how to debug it further.
> This slowdown did not exist in my previous Emacs build from 2007-06-30.

Stefan found a bug in my recent changes to `insert-file-contents'.
I can't tell whether it's related to your problem but could you try
with the attached patch?