Here is an update that I just sent to tech support.
For now there still is a problem, but my document is now working fast enough that I can at least work reasonably. I will try to explain. The problem is with this particular document. I can work with another smaller document with no problems. Track changes is off.
Scan for temporary changes is now off and this is one change that definitely helped. It helped speed things up. I learned in this thread:
to turn off link in-text citations to bibliography, and turn off instant formatting. This means that Endnote leaves new citations that I add in curly bracket form until I tell it to format. When I do this it does take too long and it does freeze with the server busy dialog and I have to click that at least once. This is means I can not work for a few minutes, but it only happens when I choose to the formatting so I can work around it.
I will try to post this update to the community as well. It appears from the community that other people are having this problem with word 2007 and X4 so my feeling right now is that there is a problem in Endnote that will need to be fixed.