Software MIDI Thru "Jitters"

In the development of my MIDI sequencer, I've decided to expand the MIDI I/O capabilities of my device. This sequencer received MIDI from a Host (either my pc or anything else that can provide a clock really and hands it straight off to the other devices.. Think of it as a midi hub essentially..

I started out with a MIDI Thru box like this: MIDI Thru Box

The next logical step was to insert my arduino into the circuit. I am taking MIDI IN straight from the optoisolator and MIDI OUT goes to the first inverter in the schematic. This leaves me solely relying on the MIDI libraries thru capabillities. It seems to work, but intermittently, I get jitters in my timing. That is, the master is sending to my device, but any slaves from the device randomly get offset - like its skipping a timing message. I've stripped my code back to the very basic and am working with a pretty simple example code (the MIDI libraries example + lcd operations).

I should also note that I'm using DFR's I2c LCD library, which seems to be pretty slow (100ms send operations)..

Any help or discussion on this would be great!