If it fails to sync with iTunes it would be due to the database size getting too large (essentially, too many tracks), not specifically to do with the 128gb size.
To use your iTunes playlists you'd have to export them from iTunes in m3u format then copy those playlists to rockbox. Note though that this assumes you are keeping exactly the same directory structure on the player as on your music library. If you aren't then it gets much more complicated. I suggest you just copy your music library as-is, wholesale, to the ipod, keeping all directory and file names the same.
If I remember rightly iTunes deliberately makes this very tedious by insisting you export each playlist one-at-a-time. But there might be some third-party iTunes utility out there somewhere that will export them all at one go.