Why don`t try benchmark mode for DAG 1 or so..
test it with:
EthDcrMiner64.exe -benchmark 2
it will use just ~1GB of ram for DAG
The problem is on driver level and it isn't related to DAG size - as far as I know. I tried to run a benchmark but the result is nearly the same (instead of 3,5MH/s I got 3,6MH/s

)
Yes the problem is AMD intentionally crippled the driver for the ETH algorithm, because they knew it would do nearly 60MH in eth mining and they would not be able to get them in gamers hands.