Hello
I do have a similar problem. In my case the SOPC Builder doesn't hung completely, but generating takes quite a long time at the point of "starting PTF elaboration point".
The same problem I have when compiling a project in the Nios II IDE, compiling a simple system library takes up to 8 minutes and about every third time it fails completely with some strange errors.
I also assume that the problem has to do with cygwin, as in both cases its involved and googling the strange errors brought me to similar cygwin issues, where a windows update was made responsible for, but none specific. As Quartus II and the Nios II IDE worked fine before I had to do a OS re-installation, this could be a possible cause.
I'm using Quartus 9.1 SP2 (same happens with 9.1 and 9.1 SP1) on a 32bit Windows XP machine with SP3 and automatic update activated (and all installed which where available).
Does any of you have any updates on that issue? May be a solution?