Just to close the loop on this, I finally was able to locate the configuration file. It is in the ImageManager plug-in at:

/editors/tiny_mce/plugins/ImageManager/config.inc.php

I changed this line:
$IMConfig['dir_max_size'] = 20971520; // 20MB

to this value:
$IMConfig['dir_max_size'] = 41943040; // 40MB

and that took care of it.


Jim