There's an issue with preg_replace and /e modifier with the Suhosin patch for PHP.
At http://core.trac.wordpress.org/ticket/8689 there's a description for a patch the not only solves the problem with preg_replace /e but also should improve performance for encoding/decoding UTF8.
Related to: http://sourceforge.net/tracker/?func=detail&aid=2818691&group_id=311&atid=100311
Sorry, wrong link: The actual change you need to do is described here:
http://blog.benny-baumann.de/?p=332
Sorry for the inconvenience.