Just to let you know, we are still investigating this -- we've narrowed it down to a particular set of changes to the source, but can't figure out how that's causing the timeouts, and thus don't know how to fix it yet.
My holding disk is filling up, too, so hopefully we'll get this fixed soon. The fix (along with a bunch of other fixes we've made while waiting for S3 to fail) will be in the next beta. Dustin -- Storage Software Engineer http://www.zmanda.com