First of all, congratulations on finishing pset7!
This problem is most likely not due to anything on your end of things. Sometimes the edX servers just get a lot of traffic and don't respond correctly. You may find that it works after waiting a few hours.
If that doesn't help, you may be able to compress the pset into a smaller file using a better compression algorithm such as
7zip, but I don't know whether the automatic grading will accept a different type of file, and don't have the means to test it right now.