The high packet loss is probably what's causing the big slow down. When a packet is dropped, the connection will recover but each dropped packet causes a delay while the connection determines for sure that the packet is not coming and then requests a copy.
If the connection degrades enough, those requests can get lost, causing further delay.
If you have another machine that you can connect to your Internet connection, then you can try that to see if it is an issue with your PC or your Internet connection.
Although TCP can recover from packet loss, retransmitting missing packets causes the throughput of the connection to decrease. This drop in throughput is due to the sliding window protocols used for acknowledgment of received packets. In certain variants of TCP, if a transmitted packet is lost, it will be re-sent along with every packet that had been sent after it. This retransmission causes the overall throughput of the connection to drop.
As a rule of thumb derived from day-to-day practical experience, in general with TCP/IP protocols a packet loss below 0.1% (1 lost packet in every 1000 packets) can be tolerated; anything higher will have more or less impact (depending on circumstances) and needs to be addressed.