I have had the exact same problem as the OP.
I found that the problem was exacerbated by the extremely thorough knowledge of the 3.5 Rules that my gaming circle has. It became increasingly frustrating as my Age of Worms campaign continued.
I've been gaming as a DM for over 30 years. I am no neophyte. But since 2001, I play only once or twice a month - and my players play every week. So that imbalance built up over the course of 3.xx to the point where their familiarity with the system far outstripped my own.
It was not a disaster by any means -- but it did become annoying as the campaign wore on.
As the campaign progressed, I recognized the problem was simply an imbalance in the knowledge I had over my players far more thorough knowledge of the subtleties in the 3.5 rules. It's not that they knew the basic rules far better than I (they did, but not to any extent that made any real difference in play); rather, they knew the exploits and uber_ builds and spells introduced in the vast number of books in the 3.5 system far better than I. They were simply three moves ahead at nearly every turn.
And yes, I found myself having to spend far more time and effort trying to challenge the players. It did not help that the modules I was running were built to 3.5 core standards without optional books added on, while most players were using rules and options from the expanded 3.5 system. (Allowing in the Spell Compendium was, in retrospect, a HUGE mistake).
Ultimately, my campaign came to an early end and this power imbalance was one of the main contributing factors to that early end. To continue on with the Age of Worms would have meant a RADICAL redesign of the modules to compensate for my players greater knowledge of all the exploits in the 3.5 system beyond the core rules. That required time that I didn't really have to spend on my campaign at the time.
For a number of reasons, all of this came to a head around 13th-14th level; they kicked the ass of a VASTLY amped up Lich + henchman (CR21) in AoW #8 without even breaking a sweat. It was time to bring the Age of Worms to a close.
I tried to persuade my players to give a 4E campaign a try, but many of them were not warm to that idea. They still aren't, really. I don't blame them either. I wasn't enchanted with 4E by any means; what I was looking for was a quick fix to the knowledge imbalance, but overall, they were not interested in switching systems.
I stopped gaming for about 18 months as a result.
I waited for my opportunity and recharged my DM batteries. Ultimately, I persuaded my group to give Star Wars: Saga Edition a try. My proposal came at the right time for my circle of friends and they were all keen on the idea. I have dived into the SW:SE system and setting with wild abandon.
My better relative familiarity wih the setting and a more thorough relative understanding of the SW:SE rules puts me in a far better position to challenge the party without having a competing "metagame competition" in Rules exploits to deal with as well.
I would agree that it's not a bad problem to have, as Piratecat and others noted. That said, it certainly can be frustrating ... very frustrating. So I don't merely sympathize - I empathize with the OP.
What worked for me may not work for the OP; gaming group dynamics can (and usually are) very different, from group to group. I do recommend considering a BIG rules change though. It may be just the fix you need. If the players are not interested in that Rules change - the OP may need to let someone else run for a time - or simply stop playing for a time until the players are enthusiastic about giving another system that's NEW to them a try.
