I've heard partition magic could do such things for you, convert free space into a new partition, but i'm not sure at all (and you'd have to pay for it as it's not free). When googling I also found this
You could install a new hdd, but i'm not sure you are really allowed to do so with rented computers... well, anyway, that would be the easisest solution, make a fresh fc3 install on the hdd, install grub on it (make sure you press advanced bootloader options or whatever it's called in fedora's installer). Then you'd have to boot into your fedora partition either by changing hdd boot order in the bios (i'm not sure it works allt the time though, grub sometimes hangs if you do) or by using FC's rescue mode / disc.
Check the guide i linked to is pretty thorough on what you have to do etc.
Edit, if you use the same hdd, and fedora doesn't give the option to install grub on /dev/hda2 (or wherever you have installed linux) don't install a boot loader at all. Start FC from the recovery console and run:
root (hd0,1) #where your /boot-partition is
setup (hd0,1) #where you want to install grub