After some investigation I don't believe it is an issue with VCD. I believe it is Windows cache manager allocating the memory to cache the image, especially if the image file is mounted over the network.
This is exactly what I'm doing in my situation. The ISO file is mounted over an SMB share to Windows 7. I'm very glad you've been able to reproduce this 100%
The memory isn't gone, Windows will use it as soon as it is required.
I also noticed that it seemed to be a massive increase in Windows Cache usage, however it does get released and the cache will continue to increase until the entire system goes down - as everything is allocated to cache.
Hopefully, the help from Ope and co will help nail this one down perfectly
Oh, and as always, I'm more than happy to try a new build