At this point, I exclusively ferment in buckets for this exact reason. I only use 5 gallon carboys for dry hopping, bulk aging/lagering, and intensive fining (if I know the keg will be shook up and so I can't effectively fine in the keg and I can't fine in the primary because I am harvesting the yeast).
6.5 gallons is, IMO, the minimum size that works for a FULL 5 gallon corny keg. However, if you guys are as financially tight as it sounds... you probably aren't kegging. I would just switch to 4 gallon batches if I were you. That being said, I have tried what you describe (adding 1 gal of water to a 4 gal batch of fermented beer), and the beer came out fine.