For about a year now my computer has been having "mood swings" with its fps. It will be preforming fine at 60 fps at rest and 32 fps in raids at fair settings for a month then the next week it will drop down to 2 fps at rest and 1 frame per 5 secs in raids. It solves itself on its own but it really has just become such an annoyance and everything i try to do doesnt help. I've tried running Disk Clean ups, Defragging, updates for the drivers, updates for the system, etc and nothing helps even the slightest. Another thing I noticed is that it doesn't seem like it even tries to perform better. It usually heats up some and the fan kicks in but when it goes into its slump it doesnt seem to work right.
My system specs are-
Dell Inspiron 1720 (laptop)
Windows 7 Enterprise
Intel Core 2 Duo T7500 @ 2.20 GHz
32 bit operating system
NVIDIA GeForce 8600M GT vid card
Do you have v-sync in game enabled? If not (you have removed it to see better peak FPS) you can try with it enabled as it should perform constantly a little better.
I have noticed that the game now uses a lot more graphics intense periods (AOE in particular which is graphics dependent).
Have you managed to figure out a pattern of when it happens? Is it when in raids during certain times in the fight, or just when locked in with 24 others? Player based attacks can also be hardwork on FPS.
Sorry i cant be more help. Maybe reduce some of your settings and see if that solves the problem in the short term.