Solved for me!
It turned out that the issue was that the Default Application Pool in IIS had ground to a halt due to a corrupt .tmp file in the c:\inetpub\temp\apptools directory (W2k8 x64)
After stopping the app pool from Server Manager->IIS, I deleted the *.tmp files.
Then I started the Default App pool and the clients started to upload their logs again.
Not long after that the site status showed "GOOD" again.