Windows XP Pro flooding network

Hi All;

I have a small network with an XP pro machine that seems to be flooding the network. There is a ridiculous number of outbound packets going out of the system and it is very very slow to respond to TCP connections, but pings respond normally. The problem here is that this system houses an application that requires we connect to it and we can't accomplish anything because the system is being flooded. As for a possible cause, I'm pretty sure that the slowness is related to the limit of 10 TCP connections per second that is present in XP. I need some way of stopping those packets. If we remove the gateway, everything goes back to normal, however we need internet access on the machine so this isn't a long term option. Virus scan showed no infection. Anyone got any ideas? Apparently the WGA is failing(despite the legitimate key!!!!!!!). Could this be some underhanded trick by microsoft?