Well, you have done some of the most recommended procedures with no positive effect.
This ARTICLE will give you some background on Memory/Resources and something to check.
I would also do a heavy test of your RAM. The links in this ARTICLE will give you some tools to use for this.
I only wish that there was a one-button solution, but there can be so many variables, that it is a process of elimination.
I do not recall reading of issues with PrE 4 and Win7 32-bit, but maybe they have been posted to other fora, and just not here.
Good luck, and maybe a Win7-32 & PrE 4 user can comment.
Well, it was nice to get at least one answer. The advice given was ok, but didn't solve the problem.
I solved it myself (kindof).
Bottom line, I think that Adobe has a clip limitation (about 30), because I can render / work with 20 clips, with no problem, but when i kept adding clips once I reached 30, it hung. So, I did 2 things
# 1 I made Premiere elements run in "high" priority using the Task manager.
# 2 made one clip containing 20 clips withinand saved them, then put all the clips (300+ in all) in ONE project, and all worked well
So for those with the same problem, see if you have too much clips in your project, and try this. At least it worked for me.
Hope this is helpful
Glad that you have found the "sweetspot" for your computer and PrE. Thanks for reporting your method.