EDIT -
Seems that some users are running the patch just fine
Others are still experiencing lag and drops, but this could be because of: "Major bug fix! Server might go down more then usual 'cause I'm fixing all the bugs that's been bugging everyone," Kovu.
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If you weren't already aware, FH is having some difficulties at the moment.
It'll require you to download the new patch 1.1,
but from what I've heard there are flaws which cause lag and various glitches.
You may be able to get in game and have it working, but it may glitch out. We're assuming this is because of the new patch.
There is no solution at the moment. In the meantime I suggest we all wait patiently for the Mods to resolve the problem.