Well first option would be to find another ISP if they won't modify the settings to work correctly with your software.
A more technical fix might be to make some changes to moodle code. I noticed there are some commands in the cron.php or perhaps a file referenced from it that adjust the max memory usage and time to run. Perhaps this technique could be used to modify the upload limits as well. It would however I think require editing several files to make the changes. Perhaps give your ISP an ultimatum. Change the setting or you will find someone else to do business with.
Installing and upgrading help
Moodle doesn't find my data directory either
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