Just quoting this off the NZLUG list...
NCEA 1 Typing exam started today at 10:30....
So naturally Murphy spake.... and the network went to custard at about
9:00.

The symptoms were:
Slow performance, login etc
"ping -f somemachine" reported ~2000 packets in 5 sec or sometimes
only a couple hundred
Telnet and ssh were fine for about 10 seconds, then they'd pause for
10 seconds
VNC wouldn't connect reliably
tcpdump reported heaps of arp requests - hundreds in a few seconds.
...2 hours later...

********* said:
Worm? Virus? Broken network switch? Server down? Rodents chewed cat5 cable?
Okay, I give up. What _did_ happen?

********* said:
script kiddies in the typing exam?
20 kids in the same room typing ping -f LOL

********* said:
Someone stood on a cable?

********* said:
Give me ethereal, and a dump of the network.

The answer is that someone had plugged a flylead back into the next socket.
That's all. One would have thought the switch, or the upstream switch would
have partitioned one or other ports off.... But nope. Instead the entire
network went to shite.

Give it a try, see what happens on your networks