A Workaround Without Repartitioning:
When trying to make a system image of Windows 7, I got error 0x80780119. After searching this thread (plus others), I found my 100 MB System Reserved partition had grown a large USN journal. I assigned it drive letter F:.
Fsutil usn queryjournal F:
Then I ran this command to clear and disable the USN journal on my System Reserved partition:
fsutil usn deletejournal /N /D F:
This freed 48 MB. The USN journal on my System Reserved partition remained disabled after a reboot, which I verified by re-running the query. Subsequently, I was able to make a system image without error.
Look here for details on FSUtil: http://technet.microsoft.com/en-us/library/cc788042(WS.10).aspx
Mancer, MCITP-EA