Azure Web Apps extremely unstable following switch from VMs

Last week we made the switch from Azure VMs to Azure Web Apps (web sites). The main reason for doing so was to take advantage of continuous deployment, auto-scaling and deployment slots.
We have 4 web apps running on S2 instances (currently scaling up to 2 instances). We then have 4 other virtual machines that host our databases (RavenDB) and another web app that cannot be hosted on Web Apps. We're using VNETs to connect everything together.
Previously the entire system was hosted on just 2 virtual machines.
A week on we're finding
a) Performance has degraded
b) The Web Apps (and associated service) are increasingly unreliable
We used to deploy frequently throughout the day without issue. Since moving to Web Apps we regularly experience 503 errors for up to a minute following a deployment. We switched to staging slots to try and circumvent this but even this hasn't been foolproof.
We're now actually reluctant to deploy changes to our API during the day because it has been so unreliable.
Performance has also suffered - we're using New Relic for monitoring and our throughput has halved since moving to Web Apps despite the web apps actually having more resources than they did before.
Auto-scaling has also been very hit and miss. Our apps rarely put any load on CPU but they can use quite a lot of memory. We set up auto-scaling based on memory but rather unhelpfully the new portal changed our "less than or equal to" scaling rule
to "equal to" meaning that the instances never scaled down - thanks Azure! I believe this is still an issue in the portal.
We've gone from almost 6 months of 100% uptime to a week of regular issues. We deployed a new web app today and attached it to the same to virtual network used by our other apps and it caused a disruption in the other apps - our API could no longer contact
the virtual machine hosting RavenDB.
All-in-all this has not been a great experience and if it's a choice between reliability/performance and the bells and whistles that Azure Web Apps provide, I'll be going back to VMs.

Hi David,
It's an ASP.NET Web API application and we're deploying with Web Deploy.
When we first switched to Web Apps and deployed directly to the "live" instance we found that we were getting 503 errors. There were no errors in our application logs (Elmah) so I'm assuming this is an issue outside of the application. We do have
250 or so sites that are serviced by the API so I would expect a slight delay whilst the application starts but certainly not a 503. In some cases we had to re-deploy (the same code) to get things back.
We then switched to using Staging Slots to try and avoid this issue. Whilst this avoided the 503 errors most of the time, the time it takes for the application to come back up following a deployment has increased dramatically - and this is despite "hot
swapping" from staging to production.
Yesterday I tested this by deploying to staging and then swapping the deployment. It took over 30 seconds following the swap before the API was available. When I used to deploy to the VM it was available almost immediately.

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