Our app has its own space report via About Page -> Space Usage. It calculates al the files that app is allowed to see. You might see a huge difference between app space usage report and Nokia's storage report. We have investigated this and found out that Nokia's storage report attributes to the app the system temporary files that were created during background file transfer even though app has no control over how these files are generated and deleted. From time to time OS will delete these files and free up space. Recently GDR3 has issue releasing these temporary files. There are two ways to work around this issue. The first is to delete temporary files manually. You can go to Phone settings -> Storage -> Phone -> Temporal files -> Delete. It will take a long time and you need to keep the screen on with phone unlocked while it's running. The other way is to uninstall and reinstall the app.
For people who upgraded to Windows phone OS 8.1 please install iPodcast v3.5 which doesn't have this issue.