You asked what caused the load, it seems that identd is
one, but I assume just because it is trying to use resolve to
get ip's for fqdn's.
If I go init level 2, it's fine and very quick, but
going to init 3 causes the slug like behavior. On the host side
I assully see two of the "linux" threads running at about
50% level each, on the UML side I see what ever process like
nslookup at the top, however, though UML will be very sluggish,
it's top doesn't report a high load. Basically I can do anything
with IP numbers, but FQDN's never get resolved. I checked the
setting of resolve.conf, it's identical to the host which has
0 issues with name lookups.
I'd be more than happy to let you have access to the
machine if you like.