The Imploded crunched files have internal lib so no external lib required and that doesn't seem to have issues with 040/060.
Ah okay, it's been a while since I used it (1990's)! I'll have to play around with it again at some point. So there must be a choice then between external library (explode) and internal decompressor (inside executable)... and if you have more than one crunched executable then the library would be more space efficient.
So anyway, you're trying to squeeze the OS3.1 disk set onto just one floppy? It certainly sounds ambitious. How small have you gotten it up to yet?