Photoshop Import Clipboard Memory Error

HI, I'm trying to import a graph from excel into photoshop via copy in excel, then new doc in photoshop and paste. However, I now get a 'not enough memory to import clipboard' error in Photoshop. This is on a macbook pro with 2GB memory, no other applications running.

I've tried restarting osx, but get the same error. I have done the same operation in tiger without problems.

Photoshop CS3 which has been allocated 1400 mb memory in photoshop preferences. I've tried reducing the cache value from 6 to 4, no help.

In case this is a problem with PS and Leopard, can someone suggest a workaround without loss of quality (screencap to png is too fuzzy).

Thanks!