you can do a quick and dirty way with just the pen tool. It wont look nice to anyone looking at the file, or the print since it wont be an equal bleed.. but it'll work. Still a pain in the ass. And of course when you're bleeding 2 colors that intersect... if your cut is a bit off, it wont be that easy.
Personally I'd just offset the cut -.02 - .05" and be done with it... Unless you need it to be exact size, that should work ok with this design, and no one would be the wiser.
It'd be cool to find an addon that lets you add a .2" bleed by mirror the fill.. it'd come in handy sometimes, kind of like how in onyx you can add a 2" bleed and it just mirrors the image.... sadly I don't think anything like that exists.
So while your artist might have said it's impossible... Maybe he meant impossible within the time you want it done? Not that it'd take that long... but someone who isn't familair with adding bleed to multi colored objects like this might spend days doing it perfectly, not realizing spending 10 minutes making a mess out of pen tool would produce the same result.