This is a somewhat bizarre limitation on the Console API. I had this problem before and found the following solutions:
Console.SetIn(new StreamReader(Console.OpenStandardInput(8192)));
From the following MSDN forum post:
http://social.msdn.microsoft.com/Forums/en/csharpgeneral/thread/51ad87c5-92a3-4bb3-8385-bf66a48d6953
See also this related StackOverflow question:
Console.ReadLine() max length?