Layout size doesn't really matter. It's what the cpu has to draw to fill in that layout...like that 170 mb of memory.
Have you looked at what Ashley talks about on desiging for mobile?
Think of a phone as a small storage unit. Your game...is the 3 bedroom house you have to pack into it.
When i first started, i wanted to go big. But soon found out that ain't happening. I had to try and figure out (through reading manual entries and posts) how to pack 10lbs of crap into a 2lb bag.
My 2nd or 3rd attempt at designing a game used about 130mb of memory. I gave up. Came back and designed a much smaller one.
After being away for about a year, i went back to that previous game...got it down to under 80mb, which is still a little high, but i learned how to pack that 2lb bag more efficiently.
Layout size doesn't really matter. It's that huge bg image that is being drawn along with the 1000 other objects.
Also, check your objects in the image editor (i think its called) is there large amounts of transparency between your objects and the edges? Crop it out.
Physics is probably the biggest drain on cpu's. Are you using it in your game? Check collision boxes. Check overlap on collision boxes...
There is a ton of things that can cause your game to drop.
Your mission, should you accept it, is to learn what those things are. And then figure out how to get that 10lbs in that 2lb bag.
Also, and this is a biggie, we love capx's. The more experienced persons on here can look at it, instead of asking 100 questions in 20 posts, and see what's wrong. And you're bound to get a bit more help with a capx, instead of some dope typing up a long post and taking up space.