Service Host: Local system (network restricted) is thrashing hard disk

Solution 1:

I really appreciate the help by the user @magicandre1981. Apart from that the solution that I came to have is to disable Superfetch service in Windows. Microsoft says it improves system performance over time by seeing program usage but what I research on the internet, many users complained about it that initially when system is newly installed, it runs ok but within time, Superfetch starts thrashing hard disk.

To experiment it my self, I first stopped this service, then suddenly my hard disk usage dropped from 98 percent to 5 percent. Immediately I found that it was culprit. I disabled this service and when I hibernated system, to my surprise, the hibernate is very fast now. As well as resume was more fast than ever.

The concern that Microsoft says that it improves the performance, what I see that after disabling Superfetch Service, system performance is increase instead of dropping.

Solution 2:

The HDD usage comes from the superfetch service which preloads data from the HDD into the RAM:

Starting with Vista this service loads data into the RAM to speedup the performance of Windows. Also starting with Vista, the IO activities also have priorities like processes. And superfetch runs at very low priority. So it should not affect other IO activity, because normal IO activity runs at a high priority.

I can see that you have some 3rd party drivers running, maybe this impacts the HDD performance. Remove them and see what happens.

If this also doesn't speedup the performance, replace the WD Scorpio Black (WDC WD5000BEKT-75KA9T0) HDD with a SSD.