Not sure if I explained it right or maybe I'm misunderstanding something about how UE4 sends scenes to octane.
I don't believe the problem is lightmap generation or datasmith specific (as far as I can tell) because the slowdown is not happening during datasmith import. Everything comes into ue4 in a reasonable amount of time (~5 minutes) the problem is sending that data to octane when I click activate octane.
A few clarifications:
I don't think the problem is drive speed because it's not slow outright, it slows down over time as the file loads from ue4 into octane. It starts out going about a percent a second then slows down more and more.
My scene does use instancing, through components in sketchup, which come through in ue4 as instances when you use datasmith (though I'm not sure how octane recieves that data from ue4)
My model is not an entire building, since I was rendering one floor of the building, I already culled out a lot of unnecessary geometry. There are two rooms that are pretty dense, because they have accurate furniture and light fixtures, but we're not talking about a whole office building.
Also like I mentioned in my original post it loads pretty quickly as an fbx into octane standalone so it seems like it shouldn't be file size alone that's holding things up.
I do think potentially combining by material could resolve the issue but my hope was to use ue4 as a workspace where I can manipulate materials and place things freely rather than locking myself into material assignments made back in sketchup as software packages like Lumion do.
I totally understand why octane in ue4 wouldn't be built for how I hope to use it, because it's not a typical workflow, but I'm just trying to work out if this is a bug or workflow limitation.
Chris, I'm glad to hear you may have a fix already in place. I'll test it out on the same scene as soon as it's released. That said if you still would like me to send my scene over, let me know and I can do so for further debugging on your end.