I finally managed to get the problem fixed. The issue is not with the iwlwifi modulce, it is with ubuntu's new dns resolver. I edited /etc/NetworkManager/NetworkManager.conf and commented out the dns=dnsmasq line. From then on, all problems have disappeared. I am refiling this bug as the dnsmasq bug.
** Package changed: linux-backports-modules-3.2.0 (Ubuntu) => dnsmasq (Ubuntu) -- You received this bug notification because you are a member of Ubuntu Server Team, which is subscribed to dnsmasq in Ubuntu. https://bugs.launchpad.net/bugs/1058089 Title: Intel 5100 AGN (iwlwifi) hangs frequently -- intermittent operation To manage notifications about this bug go to: https://bugs.launchpad.net/ubuntu/+source/dnsmasq/+bug/1058089/+subscriptions -- Ubuntu-server-bugs mailing list Ubuntu-server-bugs@lists.ubuntu.com Modify settings or unsubscribe at: https://lists.ubuntu.com/mailman/listinfo/ubuntu-server-bugs