I'm sure there could be a away to split the server to reduce the player count and help cut down on lag.

What about a server that houses sparring and shops? I don't see how those 2 things would be dependent on other stuff. You say one of the major issues is releasing new items aka adding new hats or opening Nexus or Rev for the weekend. So why not make a 2nd server where those would be located. Maybe even make it so you have to go on this 2nd server to enter player and guild houses.

Maybe you could make a 2nd server by combining Balamb and Air Asia into 1 big island and move some stuff there from the main map like the Battle arena (thus moving sparring), the generic starter mount stable with the Horse race track, Angel Clan, Oasis (VIP Island) , Day care center,ect.

My point is that you should be able to take somethings and move them to a 2nd server,and allow players to jump back and forth between servers. Thus moving at least a small portion of the player count off the main server reducing lag. I wasn't trying to pick on sparring or anything mearly trying to throw out some suggestions of things that could possible get relocated that wouldn't hurt the flow of game play.