Fatal Error: simplepie.inc, memory exhausted

Can you share the XML address of the calendar you are using? By default, it requests 2500 events and then filters down to the number needed. If you actually have a large calendar, that could be a problem.

As a temporary fix, try increasing the size of available memory in php.ini and see if it still exhausts it

It's usually in /etc/php or /etc/apache if you're running linux. It depends on the distribution you are running.

Try this debug version of the module - I changed it so that instead of an arbitrarily large number of entries (2500), it only downloads the number requested. Make sure to call it "gcal_events.module" and overwrite the one you have.

Let me know if that does anything different - if it works, I'll fix it up and make a release out of it in case anyone else runs into this.

I did some analysis of my own site and noticed that PHP is using between 15 and 25MB just loading drupal. Your PHP seems to be limited to 32MB, which might be a bit low (mine is set to 128MB as a comparison). The debug version I just sent probably won't help much if you're already really close to the memory limit.

Here's what I have for mine (yours may be different depending on distribution and version):
/etc/php/apache2-php5/php.ini:
memory_limit = 128M ; Maximum amount of memory a script may consume (128MB)

Here's the Drupal FAQ for that error:
http://drupal.org/node/76156

I just did some more testing and increased the number of events to 500. Memory usage went up to 50MB. Looks like simplepie can be a bit of a memory hog.

Try this newer debug version. It should list memory limits and memory usage in the debug output. Just look for each time it says a memory usage and see what it is. If it's ever 20-25 or higher, you might want to raise your memory limit from 32 to 64. If it's down below 20 you might be fine.