I've tried everything suggested. Unfortunately, the problem persists.
I even went through the process of reinstalling a fresh Win 8.1 and then MMA V10 (nothing else), but the problem persists. The only difference being the "Disable Dynamic Evaluation" dialog does not pop up anymore.
I did find out that the frontend does not lock up indefinitely. It will eventually come back (haven't timed it... it is many, many minutes). As soon as I interact with the plot, it locks up again. As you suggested, Sean, it is the interaction with the plot that is locking up the frontend.