fry:
Okay, just found out that if I comment out the strip.show() in the loop everything works fine...
Sorry. I have never used the neopixel library.
I suspect it is not strip.show() that is the problem but the fact that you call it 256 times in a FOR loop
for(j=0; j<256; j++) {
Just call it once and allow loop() to do the repetition and use a count variable to keep track of the iterations.
...R