My server is responding badly when I am in ssh. I did a traceroute and got this:

1 146 ms 103 ms 102 ms ts006e01.per-md.concentric.net [206.173.56.3]
2 130 ms 117 ms 109 ms 206.173.56.1
3 138 ms 206 ms 104 ms 209.220.97.101
4 161 ms 132 ms 133 ms a14-0d122.tran1.chi-il.us.xo.net [207.88.50.197]
5 154 ms 143 ms 134 ms ge1-0.edge1.chi-il.us.xo.net [64.220.0.181]
6 322 ms 141 ms 234 ms 207.88.50.242
7 289 ms 496 ms 345 ms pos6-0-2488M.cr2.CHI1.gblx.net [208.49.59.209]
8 315 ms 392 ms 235 ms pos1-0-622M.cr1.HOU1.gblx.net [206.132.116.126]
9 371 ms 251 ms 245 ms pos0-0-155M.ar1.TPA1.gblx.net [206.132.116.98]
10 * * * Request timed out.
11 308 ms * 307 ms sg1.indexthis.net [66.33.60.115]

Is the packet loss being caused by my server, or is it the fault of my upstream provider (Dialtone Internet)? And what's the deal with hop #10---is that a router that doesn't respond to pings?

It look's to me that the router/switch you are on either does not respond to traces or is having major problems.

Also, your provider looks a little on the slow side.

Asking your provider never hurts, either.