[detuur]

There's just one thing I don't get with this approach. How do you make use of the space savings? You've explicitly created an outside disk image which is larger than the ddrescue image, and the ddrescue image is inside that larger file. So while the inside image is taking less space inside the mounted loopback volume, the outside disk image will always take the original amount of space. Do you trim the outside volume after you're done or do you somehow extract the lzo-encoded disk image after?

[pastage]

It's called sparse files, it's files with holes in them where no data is written to disk. You can have terabytes of files on small disks as long as they contain a high % of bocks of only zeros.

[detuur]

Can't believe I've gone so long without knowing about sparse files.

[jlgaddis]

Millions of zeroes in a row tend to compress pretty well.