Good to hear the chat panel workaround helps a bit. Since you’re on WSL and the lag is still there even with the panel hidden, could you try a couple more things?
Open Process Explorer (Ctrl+Shift+P > Developer: Open Process Explorer) and check which process is using the most CPU or memory, especially extensionHost and ptyHost. If you can, please share a screenshot.
Run Cursor without extensions. In a terminal, run cursor --disable-extensions. If the lag goes away, an extension might be making things worse on WSL.
Close any existing agent chat tabs that include file changes or diffs, then open a fresh new chat.
The team is aware of a broader performance slowdown on Windows in version 2.6. Your note that it still happens on WSL after the latest updates is helpful and helps narrow down the cause.