Minecraft lags tremendously when near large amounts of moving water (waterfalls).

This bug DID NOT occur in 1.6.2 or 1.6.4. It started happening immediately upon upgrade to 1.7.2.

What I expected to happen was...:
Smooth game experience. With VSYNC on, I typically get 40-60 FPS pretty solid, and with it off I can hit up to 120.

What actually happened was...:
Whenever I get near large quantities of moving water (waterfall down a mountain, etc), I get tremendous lag. I can lag for multiple seconds at 0FPS.

I teleported another player to my location and he experienced the same massive lag I do. It appears to be clientside lag, not server lag. I never crash or get kicked off.

Steps to Reproduce:
1. Go to a mountain
2. Create a large number of waterfalls down the side by putting water at the top
3. Look at the waterfalls and move your camera around (walking is not necessary)
4. Lag like crazy.

Using shift-F3, root.tick.level.chunkCache.recheckGaps accounts for a majority of my CPU when this bug is occurring. It's normally a very small part of my CPU usage.

Happy to provide my worldfile if it'll help, but it's 100MB compressed.

As a Java developer, I'd also be interested in helping Mojang optimize performance in general. Feel free to contact me if you need any help.