Some sites are too secure for their own good.
The problem is the Retailer/Distributor is often the only one that really looses out financially when a transaction turns out to be fraudulent so it very often pays to be quite strict (We are certainly biased towards the stricter side of things when it comes to payments). We are looking at ways to securely take card payments from abroad but for the reason you've stated (Our current card processor is unable to verify a non-uk billing address) we are very reluctant to do so just now.
But if I was on holiday, or away on business/work and wanted to buy something from your site to be delivered to my UK home address, surely blocking me because I'm not connecting from the UK but connecting from a specific other country is a bit overly-secure? Wanting it delivered abroad, yes, can understand that, but not if it's to be delivered to the cardholder's address.
Oh yeah, blocking you because *you are not placing your order within the UK is taking it too far, my system would allow that as long as the billing address was UK based and it matched the payment card.
Sorry if I misunderstood you Sarah.

*Although I have been tempted to block traffic from China in an effort to stop the constant "Dear Mr Matthew, we want to partnership with you wonderful company, we supry you ruvery product rong time" emails