MG_ The RAMDISK_CD kernel can't be made capable to run X11
Don't think so--too many features compiled out.
MG_ Why not recreate the required environment? The ISO contains the GENERIC kernel anyway
Sure, you can do that too. create & format a partition somewhere, un-tar the GENERIC kernel and some binaries, then use the CDROM bootloader to boot from that.
MG_ What exactly sets the RAM limit of a RAMDISK_CD kernel?
See here.
MG_ Workaround would be to complete the full installation procedure and do it again as "2nd phase", but then with a full kernel to enable X11.
Seems simpler to rather build an ISO image with a GENERIC kernel and whatever additional stuff you want...