Replying to my own post in case anyone stumbles across this thread. The error I was seeing turned out not to be related to backup files but to settings in IIS 7 / 8. A 30MB limit is in place by default via the Request Filtering feature. I came to the solution via a tracker item - the link below was in one of the responses.
Go to the 1st response for the solution that worked in our case.
http://www.webtrenches.com/post.cfm/iis7-file-upload-size-limits
Perhaps this helps some one in the same situation.