[dnanian]

It sounds to me like your code isn't running, or perhaps hasn't been compiled in: onBeforeRunningCopy is going to happen before SD! runs at all -- SD! hasn't even been launched yet.

Note, too: if your DMGs are the same size as the original volume, that's as large as the sparse image would ever grow (since the size of the original volume is the maximum size set). As such, you're not buying yourself any room at all...