I believe this can be trivially demonstrated by doing:

    :autocmd CursorHoldI * silent execute 'call feedkeys("\<C-r>\<Esc>", "n")'

hitting "i", and watching memory usage instantly skyrocket.  Various other 
permutations also trigger the leak though.  The speed of the leak will 
obviously vary with 'updatetime'; for the most immediate effect, set it to a 
very low value.  Oddly, feedkeys() in a CursorHold autocommand (i.e. in normal 
mode, not insert mode) does not leak.

Among other plugins, Conque <https://code.google.com/p/conque/> does this.  
It's a hack, obviously, but until Vim gets real support for some kind of async 
events, it's one of the more portable techniques; notably, it works without 
+clientserver so it can be used in vim in a PTY rather than a GUI.

I am not including a bugreport.txt because this seems to affect all versions of 
Vim 7.3 that I tried it with, so it does not seem runtime or plugin dependent.

Thanks for your consideration, and thanks for Vim,

-glyph