Like the title says. I'm hosting a LAN world over a tunngle connection (Project Ozone btw) and my game is extremely laggy while my connected players are just fine.
I have 4GB dedicated to the pack and it only ever shows it using about half that. I'm not running a resource pack or anything like that. I've also been able to run larger packs than this thru the same connection without any trouble.
Ok. So the first question is, what kind of lag are you getting?
Players run a client, only. The client will "fake" expected responses. As long as you are not doing something that has to have a server response, such as opening a chest, or killing a mob, you can seem very responsive even if the server is slow.
Yet on the same machine, you might see contention for resources between the client and server.
Now, 8 cores, and 32 GB -- you're not running into physical resource shortage. So what's your client set to use for memory and garbage collection?
By lag, I mean everything is extremely slow. I'm pulling 2-5fps while my players easily pull 50-60. I can't move with reliably. Typically when I open an inventory I can manipulate items without much trouble.
I have 4GB dedicated to MC and looking at the F3 screen i'm never actually using more than 2.
I've recently started noticing system-wide symptoms and, after some extensive testing, I have determined that I have a bad stick of RAM and my CPU seems to be compromised.