iMovie crash dump

I have had repeated problems with iMovie crashing when trying to render (finalize) my project. I have been all over this forum and have received many helpful suggestions. I have taken my iMac into the Apple store and had all sorts of diagnostics run on it. The hardware checks out ok and the geniuses (job title, not sarcasm here) do not know why iMovie keeps crashing. It seems to me that if my graphics card is not top-of-the-line (it's not), the rendering process would simply take a long time, not cause iMovie to crash. I say that only in terms of reasonableness, not in terms of any actual knowledge.

I tried once again to recreate and render my movie. I used a fairly scientific approach as follows, starting with a very small project, and checking to see if it would render at each step:

- video clips only (3 minutes) - rendered ok

- added background and title - rendered ok

- added 8 still photos - rendered ok

- added 1 song - rendered ok

- added 1 picture-in-picture to background/title - rendered ok

- added 4 more picture-in-picture photos to background/title - rendered ok

- added more photos, more video, 1 more song (total time 6:55) - rendered ok

- added more photos, 4 more video clips, 1 more song (total time 13:34) - rendered ok

- added more still photos, more short video clips, 1 more song (total time 17:04) - crashed

Here is the top of the crash dump:

Process: iMovie [309]

Path: /Applications/iMovie.app/Contents/MacOS/iMovie

Identifier: com.apple.iMovieApp

Version: 9.0.8 (1778)

Build Info: iMovieApp-1778000000000000~1

Code Type: X86 (Native)

Parent Process: launchd [135]

User ID: 501

Date/Time: 2013-01-30 18:31:42.044 -0500

OS Version: Mac OS X 10.8.2 (12C60)

Report Version: 10

Interval Since Last Report: 154568 sec

Crashes Since Last Report: 9

Per-App Interval Since Last Report: 77123 sec

Per-App Crashes Since Last Report: 2

Anonymous UUID: 5F504B22-02E3-D889-B175-6C697A229337

Crashed Thread: 0 Dispatch queue: com.apple.main-thread

Exception Type: EXC_BAD_ACCESS (SIGBUS)

Exception Codes: KERN_PROTECTION_FAILURE at 0x0000000000000000

VM Regions Near 0:

--> __PAGEZERO 0000000000000000-0000000000001000 [ 4K] ---/--- SM=NUL /Applications/iMovie.app/Contents/MacOS/iMovie

VM_ALLOCATE 0000000000001000-000000000006b000 [ 424K] ---/--- SM=NUL

Application Specific Information:

Performing @selector(a_finalize:) from sender NSMenuItem 0x7a6b7830

Thread 0 Crashed:: Dispatch queue: com.apple.main-thread

0 com.apple.ATIRadeonX2000GLDriver 0x08de068d 0x8be9000 + 2061965

1 com.apple.ATIRadeonX2000GLDriver 0x08de09ab 0x8be9000 + 2062763

2 com.apple.ATIRadeonX2000GLDriver 0x08dde210 0x8be9000 + 2052624

The crash occurred when trying to allocate virtual memory, that is clear. I assume this is a kernal protection failure because allocating VM is a kernal-level operation. Thread 0 shows the a call to com.apple,ATIRadeonX2000GLDriver. My graphics card is an ATI Radeon HD 4850 512 MB.

So, my question - is this an attempt to allocate VM in the graphics card and my card does not have any more memory available? Or is this an attempt to allocate system-wide VM and my system does not have any more memory? If it is the card, I don't believe I can do anything about that (can I upgrade the graphics card in my iMac?). If it is system-wide memory, I can add more memory. I currently have 8GB of memory and I can add 8 more for 16.

FYI - here is my system:

iMac, 27-inch, Late 2009

Processor: 2.8GHz Intel Core i7

Memory: 8GB 1067 MHz DDR3

Graphics: ATI Radeon HD 4850 512 MB

Software: OS X 10.8.2 (12C60)

Any ideas?