Actually, this is sounding like a bandwidth issue; 1789 has half the inputs of newer builds meaning that your speed increase is likely from that. I'm thinking one of you are having bandwidth throttled something horrible.
Try playing with someone else, have your friend play with someone else. Single core should work for you; this is all on networking from what I've seen. Firewalls HAVE caused this in the past in some strange cases, may want to try disabling firewalls on all computers temporarily. Your computers are fast enough, but somewhere, the networking is derping, and I don't think it's dolphin's end.
Try playing with someone else, have your friend play with someone else. Single core should work for you; this is all on networking from what I've seen. Firewalls HAVE caused this in the past in some strange cases, may want to try disabling firewalls on all computers temporarily. Your computers are fast enough, but somewhere, the networking is derping, and I don't think it's dolphin's end.