>>Do you think this particular method can be a source of the error?
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>>The external application calls this dll with the 'Invoke' call passing an XML string with parameters. Then invoke method parses the string, calls appropriate method of the class and returns back usually an xml string or a string.
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>>UPDATE. With commented MySQLExec the first call of GetItem method takes 0.02 sec. and last call takes 0.14 seconds, so there is still a memory leak.
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>(1) try releasing lcSource as well
>(2) If the method does not change tcSource, pass it by reference - but do not release it here
>(3) You have multiple exit points (release )
>
>(4) I do not think that the difference between .14 sec and 0.02 sec is an indicator of a memory leak

I applied your suggestions 1-3 - testing now. To me gradual increase from 0.02 to 0.14 (with MySQLExec calls commented out) is a clear indication of a memory leak. Any more ideas of restoring memory?