Just one observation is it appears that you're firewalled without allowance for incoming. That might be due to your computer firewall or a hardware device like a modem/router using a NAT firewall.
Did you configure your firewall so it allows LW full access (advisable not to have 2 active firewalls b/c they can interfere with each other); Firewall configuration instructions (click on link)
Go to LW's menu bar, Tools>Options>Speed & tick & apply to Disable Ultrapeer Capabilities. This is of no use if you're firewalled.
Why this memory problem is happening I don't know. Configuring your firewall may well help. Someone else may have some ideas. One possibility might be to jump back your java version but I won't suggest that until someone else has suggested alternatives. So how much ram do you have anyway? And how much available Hard disk drive space. Have you defragmented your HDD recently?
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