Animated Avatars usually are done by 'layers' of images which increase the size of the image for each 'layer of movement' there is on the image - so unless the Image was created a) with less images and / or b) smaller images were used to create the layers - then the image cannot be uploaded.
If you know what the image was created in then you can sometime open and remove images to reduce the size - but I don't know of any easy way to do that (.gif files are usually animated Gfs which a program like ULead GIF Animator may be able to open it and allow editing - but I'm not a graphics expert
)
Just a general Note for everyone: The maximum size of your custom image is 64 by 64 pixels or 87.9 KB (whichever is smaller).