Basing on the given information I could suggest to upgrade to 3.2.4 and tune caching and preloading (read-ahead).
I would like to respond to your message. Veranda is one of my collegaues who is out of office today.
We have tried the 3.2.4RC2 and we could not use it.
I have opend a topich about our problem why we could not use 3.2.4:
Shortly: the new versions of JBoss genereates different SQL code.
Oracle RDBMS can not interpret SELECT DISTINCT with FOR UPDATE and this is understandable. 3.2.2RC3 generates the same SQL code without FOR UPDATE clause, so our application runs fine in this version.
If we are able to run our applcation on 3.2.4 we can tune the cache size and policy as you recommended.