Hello again roperl,

I do not know if you have managed to resolve your problem but I was trying to search through the web regarding your question and I found this article that I think is useful The problem of decrypting big files encrypted with openssl smime.

It is not referring to OpenPGP but more to encryption limitations I assume are applied the same problems. From the link above:

Yes you will hit that problem with large files. The S/MIME encrypt str
+eams with a low memory overhead while decrypt does not stream and nee
+ds the whole 
file in memory. It's a serious amount of effort to stream decrypt and 
+so far there hasn't been enough interest to do that.
[download]

Reading it maybe it will assist you or other monks to have a better understanding. It is not a solution to your problem but more about general knowledge.

Hope this helps, BR.