It could be limited by a global setting, but if your hosting company is assuring otherwise, that probably rules out that.
But, I remember having a host once that had their global PHP.ini file set for 8MB uploaded... I went and changed by end to 25MB because I had a few larger files that I wanted to upload here and there... but, regardless of what I changed it to, the max upload allowed was only 8MB even though the phpinfo file recorded the user value as higher, I took a closer look and could see that the global value never changed.
But if your file is under 2MB, I cannot see that being a problem at all... even the most strictest of hosts typically allow up to 8MB.
But if you really want to rule that out, create a basic php page with the purpose of having a form with just one file field and an submit button. Then apply the DFP behavior to it and try to upload the file. That way we can rule out if there is anything else going on with the current page you are working on. If you make the simple upload page and it still won't upload, I would dare say then the host is probably the culprit as I have had zero trouble with DFP on either of my two current hosts.