Thanks Stéphane.
It seems this issue has been around for a long time - more specifically affecting the “nested” install for VMWare. Based on what I have read, there is a “fling” (plug-in) that can be installed on the ESX servers to address this problem. It can be found here
As to your points above, option #2 from your list won’t work due to the max number of physical ports that can be connected to a VM. And, as you mentioned, option #3 will be difficult to implement in our environment since we have been in production for a while. It seems we are stuck with promiscuous mode and the performance impacts. I will try to install the VMWare “fling” and see if that helps.