I just ran into the same problem when upgrading a QNAP TS-209 from wheezy to jessie. The initramfs partition is quite small on this system (~ 4MB).
In my case MODULES=dep had already been set by the installer. The change to get the initramfs below the limit was to use COMPRESS=lzma, which brought the size down from about 4.2 MB to 2.8 MB.
I've seen that the updated flash-kernel package (which I didn't have on wheezy yet) mentions MODULES=dep in the error message, it would be great if it could suggest the better COMPRESS options as well, and save the next person an hour or so of scratching around :-)
Cheers, Karsten