The u-boot image is quite large.
That depends on what you are comparing it with. You can always take out what you don't need to trim things down.
Has anyone done any working in getting a compressed u-boot image to boot ala the Linux kernel ?
Yes, but it's difficult to support multiple platforms without complicating the build process. I need a u-boot __binary__ to be very small since it must fit into a small serial flash (config) device for an FPGA (w/Nios-II). But I also need many features (with long help text). So, I tried a few times to come up with a general solution ... but never really liked any of them.
In the end, it was easier to just gzip the stock u-boot.bin, and link it in with some simple startup/decompress code. So, I have a very compact binary ... and I avoided the challenge of keeping Wolfgang happy with a maintainable, general solution ;-)
Regards, --Scott