I think that the server should ping or set up a lag count for everyone's connection to make sure that they aren't very lagged or disconnected. We sould all see the same thing, just possibly at different times rather than in lag bursts or not at all.
I've died at least 3 times because I've lagged for 15-20 seconds and not been able to prevent it. I think that the server should detect when this happens and not allow NPCs to attack again until we're unlagged.
Half of this probably doesn't make sense, I'm pratically sleeping on my keyboard right now 