dereklande, yes, running out of memory will cause the device to delete your Inbox, from oldest to newest in order to make memory space.
I find if I leave my device running for too long without a reset, it eventually runs out of memory and deletes my Inbox. Since the device is so unresponsive when out of memory, I usually do a reset before starting diagnostics, which is counter-productive because after the reboot, the device has plenty of memory.
I think that there's a memory leak in one of the apps I run (or the OS), and resetting the device solves the problem. If you have the same condition, that would explain why you see 12MB free after the reset.