IPad2 MEMORY issue.. iPad3 is fine.  [HELP]

The strange thing about this is that on earlier AIR (2.7, 3.1, 3.2, 3.3) the problem was that iPad3 was having memory issues and iPad2 was near impossible to crash.
Now running AIR 3.4 Public .. the problem has reversed.
I am getting a "Received memory warning" in the XCode Instruments panel.
This happens at the exact moment I use the blitMask to capture a fairly large bitmap.
var blitMask:BlitMask = new BlitMask(allChapters_mc, 0, 0, 1024, 706, false);
TweenLite.delayedCall(1, blitMask.update, [null, true]);
The crash occurs right when this blitMask.update is called.  
on Android, PlayBook and iPad3 there is no problems.
Any ideas around this ?

After days of trying everything I could think of.  I finally found a solution.
It seems that changing my library images from Lossless to Photo Compressed fixes the problem.   Even if I change to Photo Compressed and set to 100 it works.
I'm wondering why altering compression settings on images that haven't even been called to the stage yet works ?

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