Out of memory when creating new articles

Hi
I have problems when using World News template to create articles.

Sometime when I try to manage an article, It got the Fatal error: Out of memory error messages. If I refresh, I will load the content as normal.

But now I cannot Create new articles ( we have about 7k articles with highest ID: 11,200)
It keep giving me the error:
Fatal error: Out of memory (allocated 16777216) (tried to allocate 122880 bytes) in /home/****/public_html/home/libraries/joomla/document/html/renderer/head.php on line 157

I have full access to my Server and I have configured memory_limit to 350M
allocated 16777216 is equal to 128Mb

I monitored the moment I pressed Create New articles, there were still over 300Mb of free RAM available.

What should I do to fix this?

Thank you very much

Actually, the article was created. I can view it from the front-end but cannot edit it now

Updated: my server info:
Apache 2.2
PHP 5.2.9