It is brand new game with brand new disks. I did even further research and the bottom line is this issue is a perpetual one. It doesn't matter if you have the best of PC hardware or the latest patches or drivers because it strikes even the newest machines. Since 2000 Blizzard has yet to rectify the problem which squarly resides in their coding. One would think that one of the many patches they released for this game would have corrected the issue. Anyway...
Here is what I had to do to rectify the problem:
1. Transfer my saved game to another folder.
2. Uninstall the game and delete the Diablo folder.
3. Run CheckDisk which took some time.
4. Run defragment.
5. Reinstall the game.
6. Patch the game.
* It worked but if I have to go through this again I might just leave it uninstalled!