I got a few questions here. Does heavy packet loss directly effect website connection speed. How much packet loss is considering too much and whats the common cause for heavy packet lose.

Short answer: YES.
Anything over 2% is BAD. 5-10% is REALLY BAD.

The reason: TCP/IP is dropping packets which slows everything down when you are losing packets. I.E. they must be resent which has an added delay, of course.

The more packets you lose along the way, the longer the delay. Packet loss is never a good thing and usually is a sign of oversaturation (along with a few others).

Is that any site that would monitor packet loss for a period of time for you?

Not sure if this is what yoru looking for but http://www.internettrafficreport.com/