Just wanted to confirm - the default setting on the virtual appliance is indeed to sync guest time with host (this seems to work GENERALLY well without having to do any additional work on the customer's part, since the hypervisor tends to be NTP synced itself). When you have that setting configured, LEM will ignore the NTP configuration, but as soon as you turn it off you can configure an actual NTP host.
Hopefully this helps with your unresponsiveness issue, it sounds awfully coincidental so far but I'll take it