Fatal error: Out of memory, but I do have plenty of memory (PHP)

Question

Since my question is getting longer and longer, I decide to re-write the whole question to make it better and shorter.

I run my website on dedicated server with 8GB

Answer 1

I would start by upgrading PHP to 5.4+ as it's up to 50% faster for some applications. They fixed a large number of memory leaks. Please see becnhamrks: http://news.php.net/php.internals/57760