have you tried the latest jsreport@1.7 and see if it's the same case there?
Is dedicated-process not recommended for IIS?
i've never used node-iis (is this package?) but it should work there without problems too. can you try running it without IIS at all? i mean try to run jsreport directly from node.js, does the problem persist?
profiling jsreport and search for possible memory leaks is in our plans, so this can be a good case for the test. can you share your jsreport config to have it as a reference in the test? anyway thnks for reporting this, we will search for memory leaks problems.