Source running out of VRAM?

so all of a sudden GMod suddenly decides to scream this at me in console

after that appears in console, textures will start to break, eg, becoming black, fullbright, or just not appearing whatsoever, and elements of the HUD will disappear. any idea how to fix this? the only games that do this are TF2 and GMod. L4D1, Bioshock, L4D2, Fallout 3/New Vegas, and SiN Episodes all ran fine, with no VRAM run-outs in sight.

PC overall:

Operating System
	Microsoft Windows Vista Ultimate 32-bit
	AMD Athlon 64 X2 4600+	35 °C
	Windsor 90nm Technology
	4.00 GB Dual-Channel DDR2 @ 276MHz (5-5-5-15)
	ASUSTek Computer INC. M2NPV-VM (Socket AM2 )	40 °C
	Philips 170C (1280x1024@75Hz)
	1024MB GeForce GT 240 (PNY)	33 °C
Hard Drives
	466GB Western Digital WDC WD50 00AAKX-001CA SCSI Disk Device (RAID)
Optical Drives
	MagicISO Virtual DVD-ROM0000
	High Definition Audio Device

graphics card specs:

         GPU	 GT215
	Device ID	10DE-0CA3
	Revision	A3
	Subvendor	PNY (196E)
	Current Performance Level	Level 1
	Current GPU Clock	135 MHz
	Current Memory Clock	135 MHz
	Current Shader Clock	270 MHz
	Voltage	0.900 V
	Technology	40 nm
	Die Size	133 nm²
	Release Date	Nov 17, 2009
	DirectX Support	10.1
	OpenGL Support	4.1
	Bus Interface	PCI Express x16
	Temperature	33 °C
	Driver version
	BIOS Version
	ROPs	8
	Shaders	96 unified
	Physical Memory	1024 MB
	Virtual Memory	2176 MB
		Count of performance levels : 3
				Level 1 - "Default"
					GPU Clock	135 MHz
					Memory Clock	135 MHz
					Shader Clock	270 MHz
				Level 2 - "2D Desktop"
					GPU Clock	405 MHz
					Memory Clock	324 MHz
					Shader Clock	810 MHz
				Level 3 - "3D Applications"
					GPU Clock	550 MHz
					Memory Clock	790 MHz
					Shader Clock	1340 MHz
	Version	3.3.0
	Vendor	NVIDIA Corporation
	Renderer	GeForce GT 240/PCIe/SSE2/3DNOW!
	GLU Version Microsoft Corporation

i’ve tried dxlevel 90 and this still persists. is this my settings, or is it a source problem?