Another option is to use the 'PS110_split_in_chunks_dialog.py' script from
http://wiki.agisoft.com/wiki/Python to divide your chunk into multiple chunks with smaller bounding boxes to mesh each one individually before merging into one chunk.
I believe this should help because reducing the size of the bounding box should reduce memory requirement even if the number of points remains the same (points outside the box are just ignored)... i think...
Then the problem is that you will be left with several meshes with seam lines between them that you have to either live with or find some way to 'close' in external software.
Also your project file will be huge if each chunk contains the full point cloud with differently sized bounding boxes.
I haven't tried the script myself, but have had experience where reducing the bounding box size enabled me to mesh a pointcloud that i couldn't previously due to memory constraints.
Before messing with the script maybe worth just manually resizing the bounding box to a smaller area to see if you get any joy.
Sorry i don't have any suggestion about what photoscan is doing or not doing with your other 100GB memory!