It seems that something is seriously wrong. You may try the following (you may have tried/done some of them already) and see whether it helps:
1) Close down Illy and open again;
2) Restart the computer;
3) Close down Illy and press Ctrl+Alt+Shift/Cmd+Option+Shift during startup (irreversible);
4) Move the folder with Illy closed (reversible);
5) Look through and try out the relevant among the Other options (Item 7 shows the usual suspects that may disturb and confuse Illy);
Even more seriously, you may:
6) Uninstall, run the Cleaner Tool, and reinstall.
Thanks Jacob - a full reboot in the end did the trick. I was getting silly memory errors as well and I have 8GB of RAM with 1TB drive - barely used machine. I appreciate your quick response.