PATH is limited to 128 characters

No, COMMAND.COM only is limited to a command-line of 128 characters long. This means that you can have a PATH up to 1000 characters if you want; the limitation is that you cannot type it on a command-line (even in a batch file).

If you use XSET for example (a program that allows you to put EVERYTHING you want in a DOS environment variable and use it as if you had assigned it the value with the standard DOS command SET), you can extend your path (or any other environment variable) as you want.