Isn't there a vert limit of 64k per mesh/surface or something? If so, you must be working very close to the limit with a 128x128 mesh - that's alot of tris for a single mesh. This 'single surface is king' methodology is, apparently, only true to a certain extent when trying to optimize for speed. There's a point where actually using more surfaces is faster than stuffing everything into a single surface. I hear that 1500-2000 tris per surface is optimal. I think you might get a significant speed gain if split your 128x128 map accordingly. I guess this might be a bit tricky given the nature of what you're trying to achieve, though.
VertexCoords performance issues
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