I am experiencing the exact same thing. Turning replication on drops my write speeds to 10MB/s maximum and only slightly reduces my read speeds. With it off I can get close to 112/115 MB/s in IOMeter reading and writing.
I have DSS V6 6.0up13.810.3902 64bit. I cannot change the VMALLOC setting as it is 64 bit. I am no keen on updating, as VMWare only has 3902 on their HCL for Open-E, and I want to be able to get support from them if needed.
Any other suggestions?