Hey Robert, are you using dual wans on your router.  If so how about using the protocol binding option under the system management tab and direct everything but your multicast traffic out one wan and redirect all your multicast through the wan that is setting up the tunnel.

I am using only one WAN1 port on Linksys RV016. That port is directly connected to (passtrough cable modem) one of 5 ports.

Than I have Cisco 2800 that I have to use to connect to remote site over VPN/multicast. Its WAN1 is connected directly to another port on comcast modem with its own external IP. the WAN2 from Cisco 2800 is connected to one of the ports on RV16. It is not WAN2 it could be any of the other ports. (I am not onsite right now)

All RV16 port settings are default from factory settings. RV16 also have static route for multicast traffic. I am attaching image of setup. Please let me know if there are any other questions.

Should I modify default Upstream and Downstream settings (512Kb/s) is this in bits or Bytes?

Here is what I have

Download Speed: 22878 kbps (2859.8 KB/sec transfer rate)
Upload Speed: 3735 kbps (466.9 KB/sec transfer rate)

You can adjust the bandwidth and see if that makes it any better for you.  I would contact the SBSC at 866-606-1866 and open up a troubleshooting ticket with them and see if they can help you adjust the settings on the router.

I already did while back. But so far did not hear anything from anyone.

case # 612500493‏. What parameters should I change? I have RV082 and RV016 and they both have the same problem with latest firmware. RV082 I can't downgrade since there is no option going from 2.x to 1.x. 1.x was working fine without any settings changes. Since I could not downgrade RV082 did go and buy RV016 (needed more ports anyway). But I found out that that router comes with 3.0.0.19 firmware that also has the same problem. Talking to Cisco support one Eng. told me that this is something that they heard from other customers complaining after release. So far as I can see the firmware is still up on web page (with out rollback if needed) not there is upgrade not even real ack from support team saying that this is a problem. Again this is only a problem if processing multicast data. Else it works fine. If multicast is being streamed all TCP and UDP data from all computers on subnet suffers slowdowns. One thing I have noticed that all computers connected right into RV082 or RV016 at the time of multicast testing are have very slow transfers even among them self on same subnet. If I connected such machines to other switch that was than connected/up link to RV0x they could communicate just fine among them self. But all Internet access was very slow.

This show that I belive there is some issue with this firmware or misconfigured settings. I did factory reset as well so I am sunning default. The question is why it was running with ok with same settings on 1.x firmware vs 2.0.0.19 on RV082 and 3.0.0.19. Perhaps new firmware has old/wrong/not updated default settings?

What should be my next move?

If the multicast is freezing up the rest of your network, what about Going under the port management tab and leaving the port being used for multicast traffic (IF Possible) to normal priority and raising the other ports to high.  Maybe run a packet capture utility and check to see the bandwidth going through the router during the multicast.  Verify that the speeds are not trying to exceed the 10/100 speed that the router will allow.

I just did run the test and using bmon util I can see that I am doing about 1 MiB. You see in my previous post what my up and down speeds are.

I think it can hit about 1.6 MiB total in some cases. I did mage any changes yet. I will do it later on tonight. I tried to download big ISO file from Internet while no multicast activity was on network just to see if this problem is related to throughput but that is not seems the problem. All other machines were fine and my winamp streaming was just fine during that download.

Any updates? I sis did not hear anything from any one...

I had major issues when I updated to that firmware.  I had to install 1.3.9.8 to resolve it.  The problem is when you do that you have to set the router up again as it does a factory restore going back from version 2..