Hey there, i work for an ISP that delivers Dedicated server, Network infrastructure and Colocation. Let me explain to you why your traceroute appears to be dropping packets.
In networking the boxes that does the routing are divided into 2 main parts, the linecards and the supervisor. These are physical cards that slot into a big box called a chassis, examples of boxes that does this is Cisco 7600 series "7k's" (7609, 7613, 7604) and Cisco Catalyst "switch" 6500 series (6509, 6513, 6504) where the last number of the series means the chassis size. The chassis of this appliances take max 2, minimum 1 supervisor cards. The supervisor is the brains of the router, it saves the config to flash disks, and runs the services that cannot be accelerated in hardware, like telnet and ssh access. The supervisor also does the job of pushing the routing table out to the linecards, and im pretty sure it runs the daemons for all routing protocols like BGP and OSPF (there are more, protocols but the ones i mentioned are standardized and most common). The supervisor also contains a super low performance RISC or MIPS cpu that does all this, and its very VERY slow.
The second part, linecards are the ones who do the heavy lifting, they are the ones that takes traffic on on the 10 gig ports and sends it out on the correct ports so that the traffic gets there. The way the linecards does this so quick is because it uses a very special chip called an ASIC, which stands for Application specific integrated circuit. This chips are the ones who does all the routing and switching, and its all done in hardware, for example, older routers do not support IPv6 because its not supported by the chip. So, why does all of this matter? Well, in your traceroute you send an ICMP packet, a traceroute is just a ping where the hop counter is set very low and the gradually increased. Therefor you are sending a ping where the hop count reaches 0 and the current hop will send the ICMP ping packet back. The thing to note here is that ICMP IS NOT ACCELERATED IN HARDWARE. The ping you send to the router is slow because it has to send your ping to a piece of shit CPU over the backplane, sometimes it just drops it because the CPU has enogh things to do. The reason you have bad latency to the hop is not because the links are congested or because the routing is bad, it just because the boxes that run the ICMP deamon on the routers are from the 1990's. When running MTR you have to make sure that all the hops AFTER where you suspect a loss also increase in latency and loss.
I talked to my boss, shoved him this thread and he was totally up for giving buddyspike a server for free for some advertising space on the websites, forums threads and in the server name. I see your name is Buddyspike but im not sure if you are the big boss to talk to?
The locations offered are Oslo, Norway (very good latency for being in northern Europe and the best hardware) or Amsterdam, Netherlands (Best latency but not as good hardware as in Oslo, also, if hardware fails it will be slower to repair because we noone down there 24/7)
The person in charge of buddy spike can talk to me in TS, my name is Cisco or just send me a PM on the forums. I have never hosted a DCS server before so i would like to talk about hardware and OS requirements.