I'm admittedly a bit new to the nuances between formats, but if you're using LRF, I'd have to assume you're targeting the Sony readers with that file. Have you tried using ePub instead? I know the two have their pros and cons, but if length is a critical issue, it might be worth exploring whether or not ePub lets you have longer books.
Another plus is that it doesn't take time to format the book when you open it up or change fonts.
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