I started a thread approx 6 months ago when I first ran into but at the
time we just uninstalled the service pack and left it. I now tried it
again with the recommendations given at the time by Craig Johnson which
are following

Try UNLOAD PROXY, then delete sys:etc\pxyhosts and pxyhosts.sav, then
LOAD PROXY -CC to clear the cache.

Try the proxy.cfg from tip #63 at the URL below.

I tried these and the result is the same. I installed the service pack
and everything is fine up till everyone starts accessing the server and
then you see the critical errors start to happen until the server locks.
Uninstalling the patch resolves the issue. This is running on NW6 SP5.