What programs are running when you change the screenmode?
I notice that your Amiga is equipped with 32Mb RAM, which should be more than enough to support your screenmode, but you might struggle for memory if you're running multiple IBrowse sessions and playing MP3s for example.
My Mediator & A1200 isn't working due to a faulty accelerator card, so I'm unable to check my ENVARC settings. Maybe you could cut 'n paste them here?