Ralackk: I found the following possible work around on the steam forums.

Originally Posted by Mirko View Post
I think I may have found a workaround or even a solution to this problem. It works for me and is reproducable on my System. It would be great if someone else could check and confirm, if this works for him or her, too:

Go to Black Velevetopia once, use the smellings salts to get out and go to Gloria's Theatre.

I tried this first with a fully completed game, but did also a quick check after redoing the Milkman Conspiracy from an older Savegame, and it also worked in that case. Unfortunately the effect is not permanently and needs to be recreated every time the game is started.

I hope this also helps others. If it works, it's a good thing you can do Gloria's Theatre, Waterloo World and Black Velevetopia in any order.
After hitting the same issue in Gloria's level (also in Lunkfish, but playable at least) with my ATI 5700, it seems like this may have worked. I was playing at max settings (4:3) and once I hit the in game cut scene with the Muse it dropped to about .5 fps. I disabled shadows and that seemed to fix the problem, but it came back a minute or two later when the stage changed.

I dropped my settings (everything off except fullscreen, and res still 1600x1200) and I tried your fix above. Miraculously it seemed to work and when I got back into the level it was back to a nice fps. Curious, I changed the settings back to what they were, and bam, fps dropped again.

I turned them off again (no change in fps) then tried your fix of exiting, entering Black Velevetopia and then going back to Gloria, and I was able to play the entire Gloria's level without any issues.

So thanks!

http://forums.steampowered.com/forums/showthread.php?t=1129194&page=5