What I've observed is that a specific app may tend to get slower over time 
as the "cluster" it runs on gets busier.

Eventually an app may get moved to a new "cluster". This may include a few 
minutes of hard downtime, even for HRD apps. Afterwards performance can be 
dramatically better.

Someone at google may be able to manually move your app if you complain 
loudly enough, although there's no guarantee the issue won't recur.

When it gets really bad all your instances can be totally idle but many 
requests still block in the scheduler for hundreds of ms (or more) like you 
seem to be seeing. Adjusting the latency settings doesn't help because the 
instances aren't the bottleneck.

Quite possibly my least favorite part of app engine, although on the whole 
I still like it a lot.

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