The wait operation timed out and sqlexception Timeout expired - asp.net-mvc-3

Question

I have weird problem with my sql azure database on the live server. The MVC controller is returning an errors as "The wait operation timed out" and Sqlexpection (0x80131904): Timeout expired".
This is happening particularly on a single a sql stored procedure. The program is that if run the stored procedure with same parameter against the database using SMSS 2012 it runs fine and returns returns in less 2 seconds.
This lets me that there is nothing wrong with my stored procedure.
I am calling the stored procedure as below.
List<FileFolderItem> folders = new List<FileFolderItem>();
using (DFModel db = new DFModel())
{
folders.AddRange(
db.GetFolderStructure(companyId, (clientid ?? companyId), folderId, currentUser.df_userId).Select(x => new FileFolderItem
{
Name = x.name,
Id = x.id,
Flags = "USER_FOLDER",
TotalFiles = x.Files.Value,
TotalSize = x.Size.Value
}).ToList<FileFolderItem>()
);
return folders;
}
I have done further test by taking a backup of the database and restore on the same sql azure instance as seperate new database and pointing my application connection to the backup db and the application works.
I don't understand how should I troubleshoot this problem, there no way to restart the sql azure instance.
Any help will be highly appreciated.
Thanks
Edited on 13/03/2013
After further investigation - the problem seems to be with Table-Valued function (getfilesbyclaims) called from sub-procedure GetFolderTotalSize. Is this functions are not fully supported. The strange thing is that the application did go live about 4 weeks ago and this problem suddenly started yesterday # 4pm.
CREATE PROCEDURE [dbo].[GetFolderStructure]
#companyid int,
#clientid int,
#folderid int,
#personid int
AS
SELECT
fd.id,
fd.name,
dbo.getfoldertotalfiles(#companyid, #clientid, fd.id, #personid) AS Files,
--0 as Files,
dbo.getfoldertotalsize(#companyid, #clientid, fd.id, #personid) as Size
--0 as Size
FROM folders fd
WHERE fd.companyid = #companyid
AND fd.root_id = #folderid
AND (fd.hidden IS NULL OR fd.hidden = 0)
Sub-Procedure - GetFolderTotalFiles
ALTER FUNCTION [dbo].[GetFolderTotalSize]
(
#companyid int,
#clientid int,
#folderid int,
#personid int
)
RETURNS INT
AS
BEGIN
DECLARE #size int;
DECLARE #tblFiles TABLE (
Id uniqueidentifier not null,
CompanyId int,
folderid int,
contentLength bigint
);
INSERT INTO #tblFiles(id, companyid, folderid, contentlength)
SELECT * FROM dbo.getfilesbyclaims(#clientid, #personid);
WITH Folder_CTE as (
select fs.* FROM folders AS fs
where companyid = #companyid
AND id = #folderid
UNION ALL
SELECT f.* FROM folders f
INNER JOIN Folder_CTE fcte ON fcte.id = f.root_id)
SELECT #size = ISNULL(SUM(f.contentlength), 0) FROM folder_cte fd
INNER JOIN #tblFiles f ON f.folderid = fd.id
where f.companyid = #clientid
return #size;
END
GO