Yes, it does sound like a memory leak. I've run PerfMon logs from time to time without coming up with any smoking guns. There was one counter drop that coincided with a couple of BES activations that looked interesting, but I haven't been able to repeat it, so I've dismissed that.
We're at the Java version installed with SP2; 1.4.2.08. But since, anecotally, MDS's memory leak isn't solved regardless of JRE version, I stopped there. Does anything else in BES besides MDS use JRE that would benefit from an upgrade?
That said...2.5 days after installing BES 4 SP2, the server seems stable. That's a recent record. Cautiously optimistic.