Amazon recently officially revealed that there's switch that will prevent KindleGen from attaching the source files thus greatly reducing the overall file size:
-dont_append_source
For example:
Code:
KindleGen -dont_append_source my.epub
will generate a .mobi file without attached sourcefiles.
You could also add the -c2 parameter for added compression:
Code:
KindleGen -c2 -dont_append_source my.epub
Note that adding the -c2 parameter may significantly increase the compile time.