Odds are you have a double blank line somewhere in there.
You shouldn't run into the 64k limit until you have a 50 meg file.
Fortunately, I have just the thing for you, since I had the same problems working on Gritecon:
SE4ComponentsRepairTool
This should clean up all the spacing for you, and chews through the file at well over 50,000 lines per second IIRC.