Hey Gopika, I had similar problems until I created an even smaller subset of the area, ran snaphu export and executed the unwrapping further on Cygwin and there seems to be progress, it is much faster now. I am working off of a 16GB RAM but increased the size of my Virtual Memory using steps outlined here: http://windows.microsoft.com/en-za/windows/change-virtual-memory-size#1TC=windows-7 which solved my “out of memory” problem.
Maybe you should try sub-setting even further too.