Hello, it does provide me with info but it still does not make sense.
The disk image is somewhat bigger then the amount of data you want to protect, but we are talking MBs, not more, so 35GB folder to protect should not take up much more space. You will need double the space though, because we will put the original data in the trash and the disk image will grow to 35GB due to pasted data, but again, we are talking 70GB, few more MBs, still far from any limitation.
Furthermore, what you tried was a good way of thinking, and should have worked (although I do not have the numbers..) but let me explain: the disk image we create will have the 10x capacity in comparison to the size of the folder you are about to protect. So if you are protecting a folder of 1GB we will create a disk image with 10GB capacity (not size!, capacity, the size will be similar to the amount of data you put it, as mentioned before).
So I would expect it to work unless you tried to put more then 10x amount of data, still, I think the minimum disk image capacity we create is 10GB.
So try to protect a folder which is 4 GB big, if that works, you should be able to add another 31 GB to it, can you try this (although this will still not tell us why it failed in the first place, but at least you will have a solution)
What is the amount of available space on your internal disk?
If you still have a protected folder in Espionage, click onto small "i" near the folder name and click onto disk image drop down menu, which path do you see?
Thanks
Zsolt