LILO Warning: The initial RAM disk is too big

Just re-installed Slackware 13.0 x64 on the HTPC, this time using a small boot partition on the extra non fakeRAIDed HDD, which I recently added to the whole rig. This 4th HDD is now the boot disk for the whole rig, and contains the kernel and initrd (while the Linux partition itself is on the RAID5 set).

Install went without much of a hitch, and even the first few kernel recompilations we fine, but lately, after adding more kernel features, I got the following LILO warning and the kernel simply doesn't boot:

    Warning: The initial RAM disk is too big to fit between the kernel and
   the 15M-16M memory hole.  It will be loaded in the highest memory as
   though the configuration file specified "large-memory" and it will
   be assumed that the BIOS supports memory moves above 16M.

So much for checking the "Optimizing for size" kernel option.

The root of the matter seems to be that uncompressed kernel + uncompressed initrd must fit within the 0-15 MB low memory addresses, and it looks like a bzipped 4.5 MB kernel + a gzipped 1.4 MB initrd don't cut it, regardless of whether your BIOS has set a hole for the 15M-16M range.

Unlike what you might read elsewhere ("Remove options from your kernel to reduce its size! / Why are you using such a huge kernel?" - how's that helpful, guys?), there is a solution right there in the kernel conf, through the "General Setup -> Initramfs source file(s)" option.
Somehow when you do that, the kernel is able to find all the RAM it needs for the initrd.

Now, I'll grant you that this makes it less convenient to modify your initrd options on the fly, yet I believe this is better than being restricted in your choice of kernel features. Plus it appears that the kernel boots a little bit faster when using the emebedded initrd.

Of course, that means that you need to create your uncompressed cpio archive from your initrd-tree before you can point to it, which can easily be done as follows:

cd /boot/initrd-tree
find . | cpio -H newc -o > ../initrd.cpio