I figured out how to clear the market cache! I saw there was 10mb left on my phone so I downloaded two large games Brain Genius and Bonsai both 7mb each. Voila my market is now 108k and I have 32mb clear with the two games still on here (I'll remove them though)
I was a little nervous my phone might freeze or something cause it was hanging a bit, but i restarted it and it runs great now.

Good luck