The static resource is a little trick we all learned to slow the leak inherent in the SL4 runtime. If you hadn't heard about it, read this for a laugh: http://forums.silverlight.net/forums/t/171739.aspx
Anyway, that static resource work around has become second nature, and while I agree it is not "typical usage", it is legal and should not (to my understanding) place us in uncharted territory.
My colleague is sending you a toy project to demonstrate the problem. The only way I can stem the leak is to employ the virtualizing feature of RadComboBox.
Thanks for taking a look.