Is there a limit to the number of items that can be added using the Appearance Menus Screen?

Could possibly be this bug http://core.trac.wordpress.org/ticket/14134 and http://wordpress.org/support/topic/rc32-menus-still-crippled?replies=28 but 17 menu items is very low threshold.

Try raising your php memory allocation using FTP:

1) You can edit the memory_limit line in your php.ini (if you have access to that file) to 64M:

memory_limit = 64M;

2) If you can’t get to the php.ini file, add this line at the top of your .htaccess file:

php_value memory_limit 64M

3) If that doesn’t work or throws a “500 Internal Server Error”, delete the line from .htaccess.

Then try adding the line below near the top of your wp-config.php file, right after the opening <?php

define('WP_MEMORY_LIMIT', '64M');

If you have a php.ini, also check and raise the execution time limits:

max_execution_time = 600

max_input_time = 600

If the server is running suhosin, try these new limits:

suhosin.post.max_vars = 5000

suhosin.request.max_vars = 5000