Its quite well known issue that when you hot redeploy bigger webapp dozen of times you end up with out of memory exception. As far as I remember its related to garbage collection issues with Class class and its more related to Java than AS. Normaly - never use hot redeployment in production and increase heap size during development. Still I'm not saying there can't be any other bug causing memory leak.
Thanks for the response.
The Class class makes sense, since they are used in hibernate and that's where I'm noticing the problems.