A recent discussion at http://answers.microsoft.com/en-us/windowslive/forum/livemail-email/windows-live-mail-attachmnet-size-limit/04dfe5ec-d23b-47fa-bf08-4b11827e44ef?msgId=771257f4-28e8-4c9b-9d74-ff9c7d8d47bd finds there is not a size issue here.
With that out of the way, read
They seem to have solved it. You may not like the solution but unless you want to work with Microsoft, it is what I'd do next.
Sorry but I don't duplicate web content here. That would be duplicating the web. Do that too much and there won't be much space left.