It's strange you don't have the View-File, Copy-File, Delete-File menu because that implies you can't load a file off the USB to internal flash. That implies your only option is to run from USB - but then that doesn't make sense because then there should be "no" limit...

Also, I was thinking about this BUFFERING nonsense. a) 128Mb is one hell of a buffer in this context but more importantly b) You can't use FLASH memory as a buffer anyway... well - it's not impossible I suppose but it would be insane. Flash is a) slow and b) has a finite write cycle so it would be loony tunes to use it for a buffer.

Only thing left I can think of is that you might have old firmware and that it needs upgrading...

TBH I'd do the Mach thing and move on...