Limited to 64k in Contiguous Mode (512k)

I'm attempting to configure a Dallas 5000 series chip to work with 512k of external memory in "contiguous mode".

Here are my memory classes, hopefully indicating a 1k spot (for my stack!) and a code/data partition at 128k:

START       END         USED      MEMORY CLASS
==========================================================
X:000400H   X:0007FFH   000400H   XDATA
X:000400H   X:0007FFH   000001H   HDATA
X:020000H   X:07FFFFH
C:001400H   C:00FFFFH   00003CH   CODE
C:001400H   C:01FFFFH   0000BBH   ECODE
C:001400H   C:01FFFFH             HCONST

Problem 1: The linker seems to be attempting to locate both my stack and variables in that first (only) XDATA segment, I suppose because I'm using the LARGE memory model? Have I specified my XDATA or HDATA incorrectly?

FWIW, my stack is defined like so:

?STACK          SEGMENT XDATA AT 0400H
                RSEG    ?STACK
                DS      1024

Since I'm using contiguous mode, I can get around this by specifying the far type in declarations, but is it necessary to do this for every variable?

Problem 2: I can't seem to actually use much of that HDATA space. I can declare up to 64k of variables, then I get the very confusing compile-time error:

error C249: 'FDATA': SEGMENT TOO LARGE

.. which makes very little sense to me. (See also another confused thread about this problem: http://www.keil.com/forum/docs/thread2733.asp.)

I can make this happen by, eg., uncommenting line 2 in the following snippet, though leaving it commented results in an error-free compile:

   char far s1[0xffff];    /* line 1 */
/* char far s2[0xffff]; */ /* line 2 */

I'm hoping someone has an idea or two - thanks very much for any help!