small source files
How small are we talking? We've had great success with bzip-style compression on ~400 KB (about 20% better than gzip), but I don't know if it scales well. It's also relatively fast to decode (something like 2x slower than DEFLATE, IIRC).
I was also considering other approaches, specifically GLZA (https://encode.su/threads/2427-GLZA) looks promising. I think it should be well-suited for code due to its design, and it seems to produce better results than bzip on LTCB (https://mattmahoney.net/dc/text.html), and with a faster decompression time.