Actually you can shrink some games. Kessen III recently had a patch released that replaced some files with dummy files and I believe downsampled the video files, but i'm not sure exactly so don't quote me on that.lol. Don't expect to be able to do it yourself though it takes a lot of time and knowledge to be able to do it. There is a way however that you can flatten a DVD-9 disk into a DVD-5. (9.5GB-->4.7GB) and put it on a PS2 hard drive but it doesn't work with many games. I think it works with The Guy Game though. Search around and you may be able to find a guide.
Kessen III is not a dual layered disc, it's not even a complete 4.7 gb. Copied that one just fine. And Jizmak is right, games cannot be "shrunk", the ISO images need to be rebuilt. And the method is almost always not the same for every game. For instance, The Guy Game is rebuilt a totally different way than let's say Bloodrayne 2, or Xenosaga for that matter. But luckily we can post here about that.
Physical Format Information (Last Recorded):
Book Type: DVD-ROM
Part Version: 1
Disc Size: 120mm
Maximum Read Rate: 10.08Mbps
Number of Layers: 2
Track Path: Parallel Track Path (PTP)
Linear Density: 0.293 um/bit
Track Density: 0.74 um/track
First Physical Sector of Data Area: 196,608
Last Physical Sector of Data Area: 2,269,583
Last Physical Sector in Layer 0: 0
Because I didn't use DVD Decrypter. I used Nero. I put one disc in the reader and the other in the burner. I clicked on copy disc and viola! about 45 minutes later I had Kessen III. If I had a way to send you the ISO image, I would. But the moderators around here don't like that type of thing. The reason why GT4 hasn't been cracked is because (and I firmly believe that everything is revolved around money) people who make other games than Sony (3rd party devolopers) don't make as much money as Sony itself. EA games is probably the next closest developer in revenue (and sometimes their games are hard enough to copy). The more money you have to spend, the harder it's going to to crack the game, I never said it was easy. I have known people having problems copying Sony games from Ico, to R & C: Up Your Arsenal, to GT4, and now the most recen God of War. My point is that unfortunatly we as the consumer who are trying to figure out how to crack this game, do not get paid an exhuberant amount of money to do it. Therefore it's easier to say "Screw this, I'm gonna just pay $39.99 for it at Target." This creates a vicous cycle. Because now we are paying them more money, and blah, blah, blah. I personally wish that this crap about GT4 would end. I am so tired of hearing about it. I didn't buy it, nor do I plan to. But I did rent it, and was very dissapointed with it. All it is, is Gran Turismo 3 with different packaging. There is only so much of cars driving around in circles that I can take.