I'm not the expert on this, but when I confronted this problem setting up Dotlrn last year I found the problem of maximim file size to lie not in Dotlrn, but in Aolserver, and in my present aolserver 4 frontend.tcl file (I have a virtual name server setup) I now find this note and line:
#---------------------------------to increase max file size
ns_section ns/module/nssock
ns_param maxinput [expr 1024 * 1024 * 10]
I hope this at least helps you figure out where to look!
Bruce