Not sure if it's related, but if you have microsoft security essentials for antivirus, this might be causing it.
Once I added diablo III.exe to MSE's "excluded processes" it fixed the FPS drop issue and it plays fine now.
You can tell if security essentials is the culprit by minimizing D3 during the fight, then open your task manager and see if MsMpEng.exe is using up a lot of CPU usage.
For some reason MSE doesn't like this encounter.
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