Usual story with MS SQL DB - inefficient queries slowing it down. With DB2 you can put your most regular queries in a lookup table so you are'nt doing full DB searches - it acts liek a cache. I think basically it needs some serious downtime and tuning done to it. I work with some systems with equally inefficient DB's, its not an uncommon thing. I found the following on the specific error, the most important line is "a better approach would be to make your queries more efficient.":
http://tutorials.aspfaq.com/8000xxxxx-errors/why-do-i-get-80040e31-errors.html
Microsoft OLE DB Provider for SQL Server error '80040e31' Timeout expired This can often be fixed by "kicking" the server, e.g. hitting refresh on the affected ASP page eliminates the problem. But how about a longer-term fix? If you have MDAC 2.6 installed, upgrade to the latest version of MDAC from MDAC Download Page. As an immediate workaround, force TCP/IP lookup in your connection string and make sure you refer to the SQL Server by IP address, not by name. For more info see Article #2082 and Article #2126. The timeout can be caused by a name -> ip lookup. This is a problem with the version of DBNetLib.dll that shipped with MDAC 2.6 -- see KB #300420 for more information. While a quick bandage would be to increase timeout values (see Article #2066), a better approach would be to make your queries more efficient. For many ideas, see Article #2424.
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