I have heard that streets in Aspen can become grid locked making driving slow and difficult. I'll be there on a Sunday and Monday in late July. Shall I expect problems?

It's a small town.
I don't remember driving problems.
Maybe things have changed.

HTTY

Perhaps there's gridlock during certain festivities, but generally, there is no problem whatsover. It's just a tiny town - we're not talking Manhattan gridlock here. If you're stuck in traffic, just look up and admire the Rockies.

Park on the outside of town, and walk it. It's a nice pedestrian town.
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The past two summers I spent a week there and don't recall seeing a grid lock situtation. Two years ago, there was construction on the bridge between the airport and town which caused a mild back up in the afternoon and even that was really a nothing, imo.

We've been there over Labor Day weekend many times, a busy weekend there, and I don't recall gridlock. But what you will probably encounter that we do everytime is difficulty parking, especially the closer you get to the mall (restaurants & shopping) and Wagner Park. Good advice above to park on the edges/outside of town and walk or take the bus - Ruby - it's free.