It doesn't matter that everything was good until Replication was added. When you added Replication onto the server, you added an extra load plus you added a whole bunch of storage needed for the tempdb and the regular db. Your I/O increased as well. Therefore, you have a bottleneck issue of some flavor.

I would run a Profile trace at the same time as you run Performance Monitor (the Windows version) while you have Transactional Replication turned on. Check all the related I/O counters in both and have the Profiler Trace include the (under TSQL) SQL:BatchCompleted, SQL:BatchStarting, (under Stored Procedures) RPC:Completed, (under Sessions) ExistingConnection, (under Security Audit) Audit Login, Audit Logout, and (under Transactions) TM: Begin Tran Completed, TM: Begin Tran Starting.

And if you still don't think that's the issue, I suggest you hire a local SQL Server consultant to come into your office for a couple of days to resolve your issues. There's no substitute for having someone on site who can look at your systems setup and then troubleshoot.