I posted a "teaser" squashfs module as well as tools to play with for now using only gzip, no LZMA. But results still may make it worth messing with if you are tight on space. Here is the size of boost.tczl before and after making into a squashfs image:
Before:
boost.tczl size: 17,170,432 bytes
After:
boost.tczl size: 10,121,216 bytes
That is a sizable difference, and only using native gzip. Here is a script that will convert your tcz directory to squashfs if you decide to play with it. Of course, have the squash module and tools installed. Run this script from inside the same directory as your tczs. And I would do this only if the tcz's are not mounted and in use as they are deleted upon creation of the squashfs tcz. If this is done in your tce directory, as long as you have the squashfs-2.6.26.tcem in there you can boot with the squashfs tczs.
#!/bin/sh
mkdir pkgtmp
mktcz() {
mount -o loop "$FILE" pkgtmp
mksquashfs pkgtmp "$FILE".new
umount -d pkgtmp
rm "$FILE"
mv "$FILE".new "$FILE"
md5sum "$FILE" > "$FILE".md5.txt
}
for file in `ls` ; do
case $file in
*.tcz)
FILE=$file
mktcz;;
*.tczl)
FILE=$file
mktcz;;
*.tczm)
FILE=$file
mktcz;;
*.tczlm)
FILE=$file
mktcz;;
*.tczml)
FILE=$file
mktcz;;
esac
done