I'm sure pinging works
I was asking about it, because when you know the pings, you can look into the numbers. I mean, you can see where it stops (where the times start to grow fast). It'll tell you where there is a problem.
More ram will help only if it's really small. For a middle-size router 16MB is enough. But you may try to install squid. But for squid you need quite good machine, disk and RAM (not much, but more than for router).