I installed a new version of Passenger (Apache mod which runs Rails apps) and bumped up the timeout time.
So it takes 1-2 mins to start the application and once the app is running, it should be okay.

I do need to run Ruby Prof to profile where there is a problem and to go over https://github.com/phusion/passenger/wiki/Debugging-application-startup-problems and hope that the ruby dev ops fairy blesses me with the knowledge of how to understand it all!

Ruby and NFS do not mix well at all, since ruby makes a *lot* of stat calls. rvm doubly so. So putting anything on NFS is going to make everything *really* slow, so highly reccomend putting them on /srv (as you seem to have done!).

I also don't think it's related to the instances freezing - those instances just fully do not allow ssh, so probably unrelated. I'd recommend attaching strace to the process to see how much filesystem calls it's making to see if there's ways to optimize that.

I think Asaf Bartov (@abartov) ran into similar issues and found ways around them, so perhaps he can help