I just joined in to say that I have this same problem. This ruined at least three weekends for me. Instead of working on new projects, I am banging my head into the wall, trying everything to resolve this.
I have Mega 2560, R2l, on Win XP SP3. It constantly either hangs with timeout, or sometimes it tells me that COM port is taken by another application. I always either get timeout or port locked by other applicaiton.
So many Mega 2560 owners are having problems with this, that developers should definitely check this one out.