Yes, FBlit could be causing the problem if you have it set up wrong. Also, even though you are using FBlit, still check to see if you're running out of Chip RAM for some reason, or if it's fragmented.
An initial suggestion would be to completely remove your current FBlit installation from your machine. Then, download the most recent version of it and install that. Trying using it's default configuration first before messing with it. I believe the most recent version of FBlit can still be found at the following web page -
LINK.
