It seems if I select a vertical block in the 2003 IDE (hold down the Alt key and select an area with the mouse), and then go to the Edit menu and select “Advanced” -> “Untabify Selection”, CPU usage for devenv.exe spikes and control never returns to the GUI. Easy to reproduce in any .cs file where tabs exist in the selected region.
If you are thinking of trying it – save everything first. Annoying, but easy to work around.
Update: Just tried this in the PDC Whidbey bits and there is still a problem.