Yes it is,
Here are the steps:
- in the finder, create one empty folder which you will later use as mount point, i.e. folder through which you will be accessing the data protected in the disk image
- start disk utility, create a new sparse bundle disk image, journaled, case sensitive, encrypted
- after it is created, unmount it, i.e. select it in the disk utility side bar and click on eject button in the disk utility toolbar
- open Espionage
- drag the disk image you just created over the espionage window, it will offer you to import it, asking for password, and mount point, enter the password you specified during the disk image creation, with the "choose mounpoint" drop down menu, select the empty folder you created in the first step, and you are done.
Please test it with some non critical data first, just to be sure all is working fine.
Let me know if you have further questions.
Zsolt