I am in the process of building a structure high up in the middle of a deep ocean on a multiplayer server. At Y:245, I built a small platform and a nether portal and set down some chests. From here I began to experience extreme server lag, being unable to open chests, go through the portal, or break blocks.

The debug screen also showed the entity count jumping all over, despite there being no entities at this height. I am also the only one of the server at the time of this report, and the bug is still occurring.

Disconnecting and reconnecting at this height does not solve this problem, though disconnecting while inside the portal did put me in the nether, and disconnecting at sea level fixed the lag as well. However, climbing back up consistently recreates this problem.

It seems that at roughly Y:185 The entity count starts fluctuating and the server lag begins.