Okay, I still need a bit more, but one of the issues I see immediately is that you are using way to much ram. Believe it or not, allocating to much can actually lower you performance, as java tries to expand to fit in the space. You should be fine with only 2 gigs, which will also free up more space to let your computer run. I want to know about your power source, as using lava tends to increase lag, but if you wire the lava directly into an AE setup it will take out pretty much all of it. Lastly, if you click the advanced options button in the java settings, and paste in this code into "Additional Java Parameters", it greatly increase the power you get from those two gigs. But you WILL have to bring down your ram to exactly two gigs. Here is the code to paste in:
Edit: When I put in the code, it added lots of smiley faces, so I will put it in a notepad file that is attached.
Good Luck!
-Kel