Wow! I just now registered for this formum precisely to post the same question you asked - I am dismayed to find no one has replied with a solution! For what it's worth, I've emailed tech support twice with this question and both times they seemed to have not really understood the problem. I'm doing the same thing, converting flac files and saving them to an external drive, yet my c: drive lost space even greater than the total size of the original files. Please, moderator, get us an answer to this question!!