Unfortunately my "function" for encoding base64 on-the-fly from 2007 [which has been removed from the manual in favor of this post] had 2 errors!
The first led to an endless loop because of a missing "$feof"-check, the second caused the rare mentioned errors when encoding failed for some reason in larger files, especially when
setting fgets($fh, 2) for example. But lower values then 1024 are bad overall because they slow down the whole process, so 4096 will be fine for all purposes, I guess.
The error was caused by the use of "empty()".

Here comes the corrected version which I have tested for all kind of files and length (up to 4,5 Gb!) without any error:

<?php
$fh = fopen('Input-File', 'rb');
//$fh2 = fopen('Output-File', 'wb');

$cache = '';
$eof = false;

while (1) {

    if (!$eof) {
        if (!feof($fh)) {
            $row = fgets($fh, 4096);
        } else {
            $row = '';
            $eof = true;
        }
    }

    if ($cache !== '')
        $row = $cache.$row;
    elseif ($eof)
        break;

    $b64 = base64_encode($row);
    $put = '';

    if (strlen($b64) < 76) {
        if ($eof) {
            $put = $b64."\n";
            $cache = '';
        } else {
            $cache = $row;
        }

    } elseif (strlen($b64) > 76) {
        do {
            $put .= substr($b64, 0, 76)."\n";
            $b64 = substr($b64, 76);
        } while (strlen($b64) > 76);

        $cache = base64_decode($b64);

    } else {
        if (!$eof && $b64{75} == '=') {
            $cache = $row;
        } else {
            $put = $b64."\n";
            $cache = '';
        }
    }

    if ($put !== '') {
        echo $put;
        //fputs($fh2, $put);
        //fputs($fh2, base64_decode($put));        // for comparing
    }
}

//fclose($fh2);
fclose($fh);
?>