Hi Phil,
You say you've tried several formats, and that is the first mistake. There is only one format to use for DVD, and that is "MPEG-2 DVD" as the Format in Media Encoder, then for Preset, choose something appropriate to your footage, such as "NTSC Widescreen High Quality". If you import any format other than the proper MPEG-2 DVD into Encore, it WILL transcode the files again.
Not sure why Encore would be using same clip twice/doubling required space. Are you using the video as an animated menu button perhaps? With the linking to various menu buttons, try linking to the TIMELINE containing the video clip, rather than the video clip itself, that could be the issue.
Back to the encoding in AME, after you choose the format and preset, probably the only parameter you should need to change is the data rate. If too high for the length of the video, the clip size will exceed the DVD capacity, and then Enore needs to transcode files down to a smaller size. There are plenty of "bitrate calculators" on the web if you search, just enter project info and it tells you what rate to encode at. Or a rule of thumb is 560/minutes = rate.
So 560/80 = 7.0 and that would be a good starting point. However, if you are using animated menus, that will take additional space and you'd need to account for that, so maybe go a little lower such as 6.9 or 6.9 to give yourself a little headroom. For short videos, I would not go over 7 or 8 anyway, the formula does not apply below an hour really.
Encore will output an .m2v video clip and .wav audio. Initially, due to size of .wav files, it will seem like these files are too big, but by default, Encore will transcode the .wav to Dolby AC-3 which is much smaller. Oh, you're on the Mac so maybe .wav is not used, perhaps .aac? In any case, Enore will transcode the audio.
Good luck with this
Jeff Pulera
Safe Harbor Computers