You can use the Advantage Client Engine (ACE) directly and call the AdsSetBinary API to set the blob in chunks. Sorry I don't have time right now to write an example for you. You will need to add this prototype to your c# file:
[DllImport("ace32.dll", CharSet=CharSet.Ansi, CallingConvention=CallingConvention.Winapi )]
public static extern uint AdsSetBinary( IntPtr hTable, String pucFldName, ushort usBinaryType, uint ulTotalLength, uint ulOffset, byte[] pucBuf, uint ulLen );
And here is a link to the C API reference:
http://devzone.advantagedatabase.com/dz/webhelp/Advantage9.1/mergedProjects/ace/api2/adssetbinary.htm
To get the handle to pass the API, see the AdsExtendedReader.AdsHandle documentation.
Update: I just saw Alex's answer and it is better than mine, I didn't know that we already wrapped the AdsSetBinary call with a .NET method. You might want to mark his answer as the correct answer to this question. :)