I uninstalled following programs and it worked, updated over the air.
bounce, firefox, battle gweld, candle, coin toss, mplayer, kmplayer, qtirreco, solarwolf, xchat irc client, teeworlds, rockdodger, tecnoballz, almostti graphing calc emulator.
apt-get clean and autoremove. Around 57mb on rootfs and it worked.
Cheers