I have valgrind-3.13.0.SVN installed from SVN today (3rd March 2017 around 13:00 CET) and I am still having issues with VEX causing an error when trying to debug our application. Running on Ubuntu 16.04 LTS x64 on a system with two Xeon E5-2620 V4 and 64GB RAM.

Command line: valgrind --tool=memcheck --log-file=valgrind.out ./ourApp

Result:
VEX temporary storage exhausted.
Pool = TEMP,  start 0x38fbfd68 curr 0x39482bd8 end 0x394848a7 (size 5000000)

vex: the `impossible' happened:
   VEX temporary storage exhausted.
Increase N_{TEMPORARY,PERMANENT}_BYTES and recompile.
vex storage: T total 8895652872 bytes allocated
vex storage: P total 640 bytes allocated

valgrind: the 'impossible' happened:
   LibVEX called failure_exit().

host stacktrace:
==16581==    at 0x38086D93: show_sched_status_wrk (m_libcassert.c:378)
==16581==    by 0x38086E94: report_and_quit (m_libcassert.c:449)
==16581==    by 0x380870D1: panic (m_libcassert.c:525)
==16581==    by 0x380870D1: vgPlain_core_panic_at (m_libcassert.c:530)
==16581==    by 0x380870FA: vgPlain_core_panic (m_libcassert.c:535)
==16581==    by 0x380A3032: failure_exit (m_translate.c:740)
==16581==    by 0x38154398: vpanic (main_util.c:231)
==16581==    by 0x38154404: private_LibVEX_alloc_OOM (main_util.c:171)
==16581==    by 0x3818DA2A: LibVEX_Alloc_inline (main_util.h:160)
==16581==    by 0x3818DA2A: addHInstr_SLOW (host_generic_regs.c:300)
==16581==    by 0x3817ADC8: doRegisterAllocation (host_generic_reg_alloc2.c:1406)
==16581==    by 0x381523B9: LibVEX_Translate (main_main.c:1046)
==16581==    by 0x380A55BB: vgPlain_translate (m_translate.c:1770)
==16581==    by 0x380DBDFB: handle_chain_me (scheduler.c:1076)
==16581==    by 0x380DD8EC: vgPlain_scheduler (scheduler.c:1414)
==16581==    by 0x380ECCD6: thread_wrapper (syswrap-linux.c:103)
==16581==    by 0x380ECCD6: run_a_thread_NORETURN (syswrap-linux.c:156)
==16581==    by 0x380ECF6A: vgModuleLocal_start_thread_NORETURN (syswrap-linux.c:329)
==16581==    by 0x3811675D: ??? (in /usr/lib/valgrind/memcheck-amd64-linux)
==16581==    by 0xDEADBEEFDEADBEEE: ???
==16581==    by 0xDEADBEEFDEADBEEE: ???
==16581==    by 0xDEADBEEFDEADBEEE: ???

sched status:
  running_tid=6