I cannot tell how or whether the UTF complaints are connected to the final out of memory!

They do, however, suggest that the problem spreadsheet contains stuff which is throwing Spreadsheet::ParseExcel off track -- possibly stuff which it doesn't know about, or stuff which is invalid, or stuff which tickles a bug...

However, when faced with an obscure symptom, I find it valuable to address the visible ones... at worst that clears away the clutter, at best one of the visible symptoms will turn out to be related to the obscure one.

In any event, I would try cutting down the problem spreadsheet to the smallest possible file that provokes the symptoms, and see where that gets me.