Max Folder Size for encrypting?

[zsolt]

There should't be. Espionage is using the same underlying OS X technology Apple was using in first version of File Vault, i.e home folder encryption in Snow Leopard.
It might be that some of the folders have some corruption or that you do not have sufficient free disk space for sparsebundle to be created.

If you do have sufficient space, then try to protect some of the subfolders, or maybe run repair permission and disk check using disk utility.

Rgds
Zsolt

[zsolt]

I'm glad to hear that, in case you run into further questions or problems, just let me know.

Rgds
Zsolt