diff --git a/UnityMcpBridge/UnityMcpServer~/src/config.py b/UnityMcpBridge/UnityMcpServer~/src/config.py
index e41b272..0f22fed 100644
--- a/UnityMcpBridge/UnityMcpServer~/src/config.py
+++ b/UnityMcpBridge/UnityMcpServer~/src/config.py
@@ -15,7 +15,7 @@ class ServerConfig:
     mcp_port: int = 6500
     
     # Connection settings
-    connection_timeout: float = 60.0  # default steady-state timeout; retries use shorter timeouts
+    connection_timeout: float = 1.0  # short initial timeout; retries use shorter timeouts
     buffer_size: int = 16 * 1024 * 1024  # 16MB buffer
     # Framed receive behavior
     framed_receive_timeout: float = 2.0  # max seconds to wait while consuming heartbeats only
diff --git a/UnityMcpBridge/UnityMcpServer~/src/server.py b/UnityMcpBridge/UnityMcpServer~/src/server.py
index cda5f3f..26b824f 100644
--- a/UnityMcpBridge/UnityMcpServer~/src/server.py
+++ b/UnityMcpBridge/UnityMcpServer~/src/server.py
@@ -1,20 +1,31 @@
 from mcp.server.fastmcp import FastMCP, Context, Image
 import logging
+import os
 from dataclasses import dataclass
 from contextlib import asynccontextmanager
 from typing import AsyncIterator, Dict, Any, List
 from config import config
 from tools import register_all_tools
 from unity_connection import get_unity_connection, UnityConnection
-from telemetry import record_telemetry, record_milestone, RecordType, MilestoneType
 import time
 
 # Configure logging using settings from config
 logging.basicConfig(
     level=getattr(logging, config.log_level),
-    format=config.log_format
+    format=config.log_format,
+    stream=None,  # None -> defaults to sys.stderr; avoid stdout used by MCP stdio
+    force=True    # Ensure our handler replaces any prior stdout handlers
 )
 logger = logging.getLogger("mcp-for-unity-server")
+# Quieten noisy third-party loggers to avoid clutter during stdio handshake
+for noisy in ("httpx", "urllib3"):
+    try:
+        logging.getLogger(noisy).setLevel(max(logging.WARNING, getattr(logging, config.log_level)))
+    except Exception:
+        pass
+
+# Import telemetry only after logging is configured to ensure its logs use stderr and proper levels
+from telemetry import record_telemetry, record_milestone, RecordType, MilestoneType
 
 # Global connection state
 _unity_connection: UnityConnection = None
@@ -34,42 +45,52 @@ async def server_lifespan(server: FastMCP) -> AsyncIterator[Dict[str, Any]]:
         server_version = ver_path.read_text(encoding="utf-8").strip()
     except Exception:
         server_version = "unknown"
-    record_telemetry(RecordType.STARTUP, {
-        "server_version": server_version,
-        "startup_time": start_time
-    })
+    # Defer telemetry for first second to avoid interfering with stdio handshake
+    if (time.perf_counter() - start_clk) > 1.0:
+        record_telemetry(RecordType.STARTUP, {
+            "server_version": server_version,
+            "startup_time": start_time
+        })
     
     # Record first startup milestone
-    record_milestone(MilestoneType.FIRST_STARTUP)
+    if (time.perf_counter() - start_clk) > 1.0:
+        record_milestone(MilestoneType.FIRST_STARTUP)
     
     try:
-        _unity_connection = get_unity_connection()
-        logger.info("Connected to Unity on startup")
-        
-        # Record successful Unity connection
-        record_telemetry(RecordType.UNITY_CONNECTION, {
-            "status": "connected",
-            "connection_time_ms": (time.time() - start_time) * 1000
-        })
-        
+        skip_connect = os.environ.get("UNITY_MCP_SKIP_STARTUP_CONNECT", "").lower() in ("1", "true", "yes", "on")
+        if skip_connect:
+            logger.info("Skipping Unity connection on startup (UNITY_MCP_SKIP_STARTUP_CONNECT=1)")
+        else:
+            _unity_connection = get_unity_connection()
+            logger.info("Connected to Unity on startup")
+            
+            # Record successful Unity connection
+            if (time.perf_counter() - start_clk) > 1.0:
+                record_telemetry(RecordType.UNITY_CONNECTION, {
+                    "status": "connected",
+                    "connection_time_ms": (time.time() - start_time) * 1000
+                })
+            
     except ConnectionError as e:
         logger.warning("Could not connect to Unity on startup: %s", e)
         _unity_connection = None
         
         # Record connection failure
-        record_telemetry(RecordType.UNITY_CONNECTION, {
-            "status": "failed",
-            "error": str(e)[:200],
-            "connection_time_ms": (time.perf_counter() - start_clk) * 1000
-        })
+        if (time.perf_counter() - start_clk) > 1.0:
+            record_telemetry(RecordType.UNITY_CONNECTION, {
+                "status": "failed",
+                "error": str(e)[:200],
+                "connection_time_ms": (time.perf_counter() - start_clk) * 1000
+            })
     except Exception as e:
         logger.warning("Unexpected error connecting to Unity on startup: %s", e)
         _unity_connection = None
-        record_telemetry(RecordType.UNITY_CONNECTION, {
-            "status": "failed",
-            "error": str(e)[:200],
-            "connection_time_ms": (time.perf_counter() - start_clk) * 1000
-        })
+        if (time.perf_counter() - start_clk) > 1.0:
+            record_telemetry(RecordType.UNITY_CONNECTION, {
+                "status": "failed",
+                "error": str(e)[:200],
+                "connection_time_ms": (time.perf_counter() - start_clk) * 1000
+            })
         
     try:
         # Yield the connection object so it can be attached to the context
@@ -97,18 +118,18 @@ register_all_tools(mcp)
 def asset_creation_strategy() -> str:
     """Guide for discovering and using MCP for Unity tools effectively."""
     return (
-        "Available MCP for Unity Server Tools:\\n\\n"
-        "- `manage_editor`: Controls editor state and queries info.\\n"
-        "- `execute_menu_item`: Executes Unity Editor menu items by path.\\n"
-        "- `read_console`: Reads or clears Unity console messages, with filtering options.\\n"
-        "- `manage_scene`: Manages scenes.\\n"
-        "- `manage_gameobject`: Manages GameObjects in the scene.\\n"
-        "- `manage_script`: Manages C# script files.\\n"
-        "- `manage_asset`: Manages prefabs and assets.\\n"
-        "- `manage_shader`: Manages shaders.\\n\\n"
-        "Tips:\\n"
-        "- Create prefabs for reusable GameObjects.\\n"
-        "- Always include a camera and main light in your scenes.\\n"
+        "Available MCP for Unity Server Tools:\n\n"
+        "- `manage_editor`: Controls editor state and queries info.\n"
+        "- `execute_menu_item`: Executes Unity Editor menu items by path.\n"
+        "- `read_console`: Reads or clears Unity console messages, with filtering options.\n"
+        "- `manage_scene`: Manages scenes.\n"
+        "- `manage_gameobject`: Manages GameObjects in the scene.\n"
+        "- `manage_script`: Manages C# script files.\n"
+        "- `manage_asset`: Manages prefabs and assets.\n"
+        "- `manage_shader`: Manages shaders.\n\n"
+        "Tips:\n"
+        "- Create prefabs for reusable GameObjects.\n"
+        "- Always include a camera and main light in your scenes.\n"
     )
 
 # Run the server
diff --git a/UnityMcpBridge/UnityMcpServer~/src/server_version.txt b/UnityMcpBridge/UnityMcpServer~/src/server_version.txt
index 15a2799..bea438e 100644
--- a/UnityMcpBridge/UnityMcpServer~/src/server_version.txt
+++ b/UnityMcpBridge/UnityMcpServer~/src/server_version.txt
@@ -1 +1 @@
-3.3.0
+3.3.1
diff --git a/UnityMcpBridge/UnityMcpServer~/src/telemetry.py b/UnityMcpBridge/UnityMcpServer~/src/telemetry.py
index bc62b95..8aed4ce 100644
--- a/UnityMcpBridge/UnityMcpServer~/src/telemetry.py
+++ b/UnityMcpBridge/UnityMcpServer~/src/telemetry.py
@@ -18,6 +18,8 @@ from dataclasses import dataclass, asdict
 from typing import Optional, Dict, Any, List
 from pathlib import Path
 import importlib
+import queue
+import contextlib
 
 try:
     import httpx
@@ -158,6 +160,10 @@ class TelemetryCollector:
         self._customer_uuid: Optional[str] = None
         self._milestones: Dict[str, Dict[str, Any]] = {}
         self._lock: threading.Lock = threading.Lock()
+        # Bounded queue with single background worker to avoid spawning a thread per event
+        self._queue: "queue.Queue[tuple[contextvars.Context, TelemetryRecord]]" = queue.Queue(maxsize=1000)
+        self._worker: threading.Thread = threading.Thread(target=self._worker_loop, daemon=True)
+        self._worker.start()
         self._load_persistent_data()
         
     def _load_persistent_data(self):
@@ -242,14 +248,24 @@ class TelemetryCollector:
             data=data,
             milestone=milestone
         )
-        
-        # Send in background thread to avoid blocking
+        # Enqueue for background worker (non-blocking). Drop on backpressure.
         current_context = contextvars.copy_context()
-        thread = threading.Thread(
-            target=lambda: current_context.run(self._send_telemetry, record),
-            daemon=True
-        )
-        thread.start()
+        try:
+            self._queue.put_nowait((current_context, record))
+        except queue.Full:
+            logger.debug("Telemetry queue full; dropping %s", record.record_type)
+
+    def _worker_loop(self):
+        """Background worker that serializes telemetry sends."""
+        while True:
+            ctx, rec = self._queue.get()
+            try:
+                ctx.run(self._send_telemetry, rec)
+            except Exception:
+                logger.debug("Telemetry worker send failed", exc_info=True)
+            finally:
+                with contextlib.suppress(Exception):
+                    self._queue.task_done()
     
     def _send_telemetry(self, record: TelemetryRecord):
         """Send telemetry data to endpoint"""