I had the same  problem with webfaction - be sure to set your static files 
to be delivered by ngenix or apache.
I followed the info in the link above and it reduced my memory usage 
However I have both a Django and a Web2py instance set up on my account and 
Web2py takes more memory for my a small  test app  (maybe a need a few more 
tweaks as I'd expect Web2py to be smaller).

One other gotcha to watch out for - on webfaction (and possibly other 
hosting services) your app must be defined at the root of your domain. I 
wasted a day trying to configure my app as a subdomain. (iow - 
myacct.webfaction.com/myweb2pyapp works; 
myacct.webfaction.com/mywepapps/myweb2pyapp *WILL NOT WORK*. 

This is mentioned in the install script that webfaction provides for 
installing web2py, but I missed it. So read it carefully. Webfaction 
support also missed this when I spent a futile day trying to get it to work.

Hope this helps,
BrendanC

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