Just a few ideas here Walt, but mostly guesses. Your problem sounds new, so maybe someone with more OS 9 experience can help. In the meantime . . .

Hmm--how big are the files? LW is probably calculating the "hash" (which is very processor intensive and can take a few minutes for a large file), so the mouse pointer might change to the hourglass (? or is it the clock--I've been on OSX too long I guess).

How's your free RAM and HD space situation? You might try giving LW and the Apple Applet Runner more memory, optimizing the HD, and keeping the Shared and Incomplete folders on the same partition as the application.

Cheers