...in case it helps some other soul:
A different solution is to download the Cisco Network Assistant to configure your switch--and *optionally* download the latest ".tar" file which has the Web interface for your switch. You can configure with the Network Assistant and leave well enough alone and you can also use it to perform the IOS upgrade for you. If you are starting from scratch and reset the IP configuration you can connect to 10.0.0.1 and then proceed to do all of the configuration with that tool.
If you still want to upgrade, and add the Web interface back, then choose "Software Upgrade" from the maintenance window, select your switch, click "Upgrade Settings", use "Standard" mode for the transfer, and browse to the ".tar" file that you downloaded. This tool seems to handle the space issues for you--replacing the existing ".bin" in the process.
