Your system should have quite enough memory to handle the mail file that you describe. Are you certain that you are using mbx format (files that have "*mbx*" as the first line)?
Have you tried upgrading to the latest version of UW imapd? ftp://ftp.cac.washington.edu/mail/imap.tar.Z -- Mark -- http://staff.washington.edu/mrc Science does not emerge from voting, party politics, or public debate. Si vis pacem, para bellum.