You'll probably have to replace the files in "VideosPAL" with 0-byte "dummy" files -- just use an empty text document and rename it if that's the case -- though I don't have that much experience shrinking Xbox ISOs, just PSP stuff.
Try deleting the VideosPAL folder and running the ISO to check for errors.
If you get errors, replace the files in the VideosPAL folder with dummy files and check again.
If
that doesn't work you may need a "black" video to replace them, so the file type is correct. These are just a few KB and contain a second or so of pure black frames.
Hope this turns out to be helpful.