After some more researching, experimenting and headache (this is bothering me since last night) I have found the solution. In addition to adding above mentioned changes to my.ini
file
innodb_buffer_pool_size = 256M innodb_log_file_size = 256M innodb_thread_concurrency = 16 innodb_flush_log_at_trx_commit = 2
I also added this line to the end of my.ini
file
innodb_flush_method=normal
Now everything works great. Looks like this is a bug related to large sector size on 2TB+ hard drives. Source for this solution can be found on this page.