It depends how quickly this happens.
If the hashrate drop happens from one second to the other, than indeed we will see a blocktime length increase that is similar in percentage as the drop factor expressed in Hash/s.
If the drop happens smoothly during 24-48 hours or so, then the difficulty will adjust pretty much on-the-fly.

Assuming an immediate drop as you describe, which is a drop to ca 2% of hashrate, this would mean that blocks will initially take 50 times longer, so we would see 1 hour blocks for a while.
The good thing is that spreadcoin adjusts difficulty with every new block, so difficulty readjustment starts immediately, but it will take a few hundred blocks for the average difficulty to normalize back to 1 min blocks.

So we might see a week or so of slower blocks that take a long time to mine, but that's the worst case.

I expect the drop in hashrate to happen in stages. Fast stages, but stages nonetheless.