I am such a slacker!
Creating the ext3 file was the easy part.
You have to adjust the parameter file also to account for the new system.img file size.
You also have to mover the entry for the system.img in the parameter file to the end just before the user entry. IE like so...
Don't forget to change your address offsets.
***Do not edit the parameter file in notepad or a regular text editor that word wraps by default.
for windows you can use notepad++
I used gedit in Linux.
Also keep in mind you can actually make the system file with extra room. v1.0 of my rooted rom has a little bit of extra space. That will change in the next version, I am going to expand that out past the extra 30mb of space that is there now.
as far as decompiling and recompiling the boot.img and for that matter recover.img...
Give that a try.
HTC EVO SHIFT FRESH ROM
NEXTBOOK 7 PREMIUM DocHoppysRomFullOnRootv2.0
Samsung epic 4g- :android app dev sacrificial learning device and developement machine.