I had the exact same problem and seem to have the exact same solution. However I know exactly what was causing it as I have had issues with byond nearly crashing previously. This new version of byond uses far more processing power when handling messages and as a result it's hitting a hard cap with windows which is refusing to let any single program use more than 25% of my CPU. It may be because it's a quad-core chip or something to do with windows 7, but whenever i recieve a lot of messages one right after the other byond likes to hang and takes a couple minutes to fix itself, however earlier tonight I got more than twice as many message in a row as I had gotten ever before due to catching up with a friend on the pager I hadn't talked to in years and they prefer multiple short posts rather than a single long post, which seems to be quite popular. I even closed every single other program except byond and then even tried a fresh restart and immediately closing everything else before opening byond and it still refused to work. This work around the OP found seems to be working, but we'll see for how long.

P.S.: I apologize for how long and poorly formated it is but it's almost 9pm and i've been up for close to 20 hours.

Edit: This work around completely prevents me from using the pager which simply won't work because Google Chrome causes my entire computer to hang after a couple hours and I refuse to use IE(and the computer is technically borrowed so i can't install a new browser).
Edit 2: Correction this work around is completely useless for me because it still opens the pager which still freezes which then prevents me from opening any other games and i have to ctrl+alt+delete byond because I can't even right-click to close it. I simply can't play just one byond game at a time, especially give how little I sleep.
This may wind up being the straw that broke the camel's back, I've been debating wether to spend the money to renew my membership again, i've been a member since I first made my account with maybe only a couple months here and there without it, but the new client was already horrible to me because it screamed of crap like Facebook and Myspace which I abhor. It's sad that this is where byond has come, what was once a system full of creativity and originally has become a clone-box that itself became a clone of other things.
Edit 3: Just tried a completely clean reinstall and when that still froze up I tried the 500 version but still it refuses to work.

im also having this problem...it takes ages until im logged in and again takes ages before i can connect to a game only for the connection to the game to fail after a sec
i also tried different versions, didnt solve it

EDIT: just a min after i posted this it started to work again...so ignore it