George,
I have had the exact same problem today and I'm just off the phone from the PTC helpline.
The problem seems to lie in the operating system - I'm running with windows XP - which will (apparently) only allow 1.6 GB of memory to be used for the application, so even if you had 10 GB memory you would still only be able to use 1.6!!
The only other suggestion I had was reduce the figure in the memory allocation (minimum is 24) but it will take a lot longer to run.
Failing that we're back to cutting out all unecessary features again..........
If anyone has any other ideas how to improve this please share