Enough positive feedback has been received that I think this fix should be made a thread of it's own.
This is not a fix for everything and every situation, but if your server was working, then suddenly wasn't after upgrading- GIVE THIS A TRY.
Chunks would not render in background regardless of client's settings.
"It's not actually lag but it feels like lag" when walking or running. Player was on LAN connection which ruled out network connectivity. Most noticeable on horses or railways.
Breaking blocks has a delay to disappear. May disappear and then reappear on player's client. Reported as "Blocks are not breaking all the time and sometimes disappear. I can break a row of ten dirt but only be able to pick up seven."
"This is completely unplayable. I am so frustrated I am going outside to mow an acre of lawn."
Upgrading the server to 1.8
Server logged many [Server thread/WARN] messages whereas NONE were logged before upgrading to 1.8
CPU use maxed out on all cores. More specifically Java.exe (or the Javaw.exe) process taxes the CPU even with no players connected, and spikes between consuming 65% and 99% of the CPU.
Java would not correctly allocate memory, ie: Allocate a gig, only 256mb would be used.
Edited the script that starts the server to include the nogui option at the end of the execute Java command.
This solution took care of the CPU usage issue, chunks started rendering again, and all the "lag" disappeared.
The only thing notable is that the GUI will not load and administration commands will have to be executed from the CLI window that opens with the script. NOT LIKE THAT REALLY MATTERS given that the GUI has been broke since previous updates, lacking the resource monitor and log summary.
DO NOT DOWNGRADE YOUR SERVER IF THE WORLD HAS ALREADY CONVERTED TO 1.8. DOWNGRADING IS NEVER A GOOD IDEA.
Players will lose ALL inventory items and ALL chests will be empty.
I can not stress enough that there was no changes made to the host server other than running 1.8.
Changing the systems JRE did not make any difference.
Attempting to allocate up to 4GB of RAM did not make any difference.
There was no reason to suspect the CPU of needing an upgrade, as it worked with 1.7.10 just fine.