the PermGen is the memory in which the classes are loaded. WIth each "reload" your whole web application is reloaded, so new classes are loaded. The permgen has a certain size, if this is full with loaded classes you get the error above.
Ways out:
(.) increase the permgen size (Java VM parameter)
(.) use CaptainCasa Hot Deployment (which we anyway recommend!), then the amount of re-loaded classes is much smaller