Have had the site working in Dev for a few months and never had any issues like this.  We went live 20 days ago and will have an issue where we can not get the site back after a App pool Recycle or Restart during peak hours.  It has something to do with Traffic hitting the site when it is trying to load/start up for the first time.  I am able to unplug the server from the Internet and it is able to come right back up with out any issues.  But this is not an option that we can keep doing.  This past time ran some SQL trace to see what could be creating the time outs and found this Stored Proc taking a duration of 30,000 plus running mulitply times so I think it locks up the SQL box.

exec dotnet.dnn_GetModuleByDefinition @PortalId = 1, @FriendlyName = N'Site Settings'

When I run in SQL Anyalyze it is only one record that registers 00:00 on the excutaion time.  So why does this take so long in production with outside people hitting the server?

I would recommend that you check out Mitchel Sellers' blog (mitchelsellers.com) and take a look at his blog entries that discuss optimzing DotNetNuke performance. In particular, you might be having some issues with the size of the Event Log or the Transaction Log, and these could be affecting database performance. The fact that the site has been running but now has issues could point to that sort of problem.

You may want to check out these tutorials:
Site logs, Event logs and Scheduler