I have ruled out blocking.
How specifically? That's a lot of LEFT JOINs. Is it safe to use NOLOCK on those tables? If so, have you tried that? (Let the storm against it begin!)
Also, not likely an issue here, but just in case it helps:
What is the recovery model of the db? FULL or not NULL?
If not FULL, be sure to specify "WITH (TABLOCK)" or "WITH (TABLOCKX)" on the INSERTed table. That at least would allow SQL to do minimal logging if possible.
INSERT INTO dbo.table1 WITH (TABLOCKX) (...)
Given that the table was trunc'd before it was loaded, no one would need be able to read anything from it in the interim anyway.
SQL DBA,SQL Server MVP(07, 08, 09) Prosecutor James Blackburn, in closing argument in the Fatal Vision murders trial: If in the future, you should cry a tear, cry one for them [the murder victims]. If in the future, you should say a prayer, say one for them. And if in the future, you should light a candle, light one for them.