Have you activated Max Random Delay on the crowd transition node? It's purpose is to randomize the start time into the newly transitioned state, which sounds like what you want. It is OFF by default.
Particle deletion is a boolean state. You can't have something partially deleted. The particle either exists or it does not. So falloff is irrelevant. You may want to look into scaling a particle to 0 to implement some kind of falloff.
I had a similar problem like that at work. I tracked it down to the fact that my network cable was being run through an older style phone system in order to connect voice to email or something. The phone could not handle the through put.
I realize you mention there is no other problems other than SideFX website but if you have a spare network cable try swapping it out with the one you are using.
