Hobby Chef
We have an official release for the issue and if you are facing this problem then I would recommend you contacting PSS and refer to this blog
http://blogs.msdn.com/b/vikas/archive/2010/04/05/bug-net-4-0-system-net-mail-unable-to-send-emails-with-large-attachments-more-than-3mb.aspx
I am expected it to be released in a public KB in some time but for the time being you can request for the hotfix by contacting PSS
UPDATE - 7/21/2010
If you prefer not to contact PSS, you can download the hotfix by yourself from the following link.
http://connect.microsoft.com/VisualStudio/Downloads/DownloadDetails.aspx?DownloadID=30226
Any chance of a fix for the Boundary=--Boundary
Where as no next part is used but a boundary instead hence no null line before\after extra included content.
This means alittle extra work code wise to support other clients that have the null line parsing wise.
If you build the example mailmessage at msdn and add a attachment or embed an object you'll see what i mean.