I just installed a phpbb mod that allows you to upload Too Big avatars in your Profile (or when creating an account), and instead of just whining at you and telling you it's too big, it will resize it for you. (Oh, and the new dimension requirements are 150px wide and 500px tall, which I think is plenty for everybody. Please let me know if you think you're an exception.)
So, go to your profile, upload your avatar that's too big, and see if it works for you! Thanks!