Of course Patrick’s solution occurred to me immediately once he started talking about splitting up the file. :)
Then I got to wondering if it would be possible to compress a large enough file and save a few bytes, in the spirit of what Mike actually wanted. For instance, if you tried encrypting with a bunch of random keys, you’ll find some such that the result ends with n 0s (say), so then your result could be something like encrypted + key + n. Typically you’d expect to find that the length of the encryption key would be roughly the length of the number of 0s, so you wouldn’t actually net any savings. But I think if you searched long enough, you might “get lucky” and find a key that generated more 0s then the length of the key, so you could theoretically win the challenge. Of course you’d have to somehow embed a program which could decrypt and reassemble everything in a tiny amount of space, but it still doesn’t seem impossible like Mike seems to suggest. Perhaps just requires an intractable amount of computing power. :)
I’m not sure if any of that made sense. I think I’m using the wrong terms for things.