Application hangs on 16GB InnoDB mysqldump using "--single-transaction --quick" - mysql

Question

Days of searching but still no solution.
My situation
I am using this command to dump a 16+Gb (growing) database (all but 2 tables are InnoDB)
The dump is run via cron once a day and sits in a small perl script
mysqldump -uuser -pxxx --single-transaction --quick DBNAME > DBBACKUP.sql
Now the website has 2 main tables that are very heavy read/write (low load when the dump is actually happening in the morning however)
The DB has 54 tables (most under 10-20 MB)
Table 1 is 71 Million rows (9GB) InnoDB table
Table 2 is 25 million rows (3GB) InnoDB table
Now when the dump runs, the application (whist accessing Table 1 or 2) is fine, until around 3 minutes into the dump when I expect Table 1 starts to backup, the website when submitting data to be inserted into Table 1 hangs for around 9 minutes, then works again, and then Table 2 starts to be dumped and the application that uses Table 2 starts to hang.
--single-transaction should not lock tables
--quick should not buffer in memory
Lastly, the CPU and MEM %'s are very low while the dump is happening.
So has anyone seen this and know of a solution or have any suggestions at all?
SYSTEM SPECS
Processor: Dual Intel Xeon E5506 Quad Core
RAM: 12 Gb DDR3
HD1: 4 147 Gb SAS drives in a RAID 10 array
HD2: 500 Gb SATA Backup Drive
OS: Linux OS - CentOS 5 64-bit
MY.CNF
max_connections = 500
safe-show-database
skip-locking
key_buffer = 128M
max_allowed_packet = 16M
table_cache = 256
sort_buffer_size = 2M
read_buffer_size = 2M
read_rnd_buffer_size = 2M
myisam_sort_buffer_size = 64M
thread_cache_size = 8
query_cache_size= 64M
thread_concurrency = 8
wait_timeout = 30
innodb_file_per_table
innodb_log_file_size = 10485760
open_files_limit = 8192
ft_min_word_len = 3
log-error=/var/log/mysql/mysql-error.log
log-slow-queries = /var/log/mysql/mysql-slow.log
long_query_time = 7
[mysqldump]
quick
max_allowed_packet = 16M
[mysql]
no-auto-rehash
[isamchk]
key_buffer = 128M
sort_buffer_size = 128M
read_buffer = 2M
write_buffer = 2M
[myisamchk]
key_buffer = 128M
sort_buffer_size = 128M
read_buffer = 2M
write_buffer = 2M
Thank You.

Answer 1

OK Looks like I found the issue.
Basically, my DB has 4 myiisam table and around 20 innodb tables, the myissam table are under 2 Mb in size (total) but were causing the locks :(
So I am lucky enough to be able to dump the innodb tables (as above excluding the myissam tables) separately (and keep consistency) from the myissam tables, and no more locking :)
If anybody has other solutions feel free to post.

Answer 2

As mentioned here you could setup replication (master/slave) and backup the slave (with or without locking) and have no fear of changes, thus getting around the locking issue.
You can find a guide to setup replication here:
http://dev.mysql.com/doc/refman/5.0/en/replication-howto.html