Unexpected Error when trying to delete attachment

I am having a user reporting unexpected error when trying to delete the attachment from a list item. I have gone through the log files,but not able to find any trace of the error. I am kind of new to SharePoint. This is happening in SharePoint 2007.

This is happening when I try to delete a file from an item field and click on ok. It's spinning for quite amount of time and throwing the error. Please help me with this.

Also when trying to save the list as template it says the below message(Include content checked).

The list is too large to save as a template. The size of a template cannot exceed 10485760 bytes.