A user named Grodin posted this on the Last Resort Website:

"Some of the more recent nvidia drivers broke swat3, gpu is working 100% and fps is like 5-10

Rolling back the driver to an older version fixes the problem:

Here is some testing results:

340.52 - Works with swat 3
344.11 - Works with swat 3

344.48 - Will not work with swat 3
344.75 - Will not work with swat 3
347.09 - Will not work with swat 3"

This driver problem affects Windows 7 too!

It appears that Nvidia has fixed the lag problem in Windows 7 with the latest drivers.

On Jan 22, 2015 they released version 347.25 and this seems to fix the problem.

If anyone else can confirm that this fixed the problem for them also this would be great.