Dead Space - unable to delete old saves "save failed"

I had this problem as well and the solution was the stupidest thing. The game automatically assumes that there is no space if it detects a 90th save file. Even if you have deleted other save files, as long as there is a file with the number 90 on the side, it will continue to think there is no space. I deleted my 90th file and a few more of them just to see if it would work and it did.