Just ignore that stupid error message. Click Yes and get to the screen where you can rescale. I always change the 3600 to 600 and check the Constrain Proportions box. Once it resizes, go to the flyout arrow beside the Preset dropdown menu. Choose Optimize to file size. From there, you'll get a menu that allows you to choose the largest file size. I use 110 K and it does just fine here.