Are you repacking the BSA correctly? You need to select the folder above the meshes folder you want to pack if you are using OBMM (so in this case, if you are using the INI option for PyFFI, add the in folder, and then the out folder to ensure proper overwrites). OBMM adds the contents of the folders you select to the BSA, not the folders themselves, so remember that. Don't forget to make sure the trees folder makes it back in. The DistantLOD folder is subjective, and I would suggest leaving it out of you are using TES4LODGen to avoid issues.
Yeah, I've got everything - my new BSA is 613 MB (good advice about ditching the LODs - I might just do that).
Finally, make sure the BSA retains the same name as is defined in sArchiveList entry in Oblivion.INI, and don't forget to reset the timestamp for proper Archive Invalidation.
Got the ArchiveList entry.. but how do I reset the timestamp? I can't find anything about it in OBMM (and it would appear that this is, in fact, the problem - it's got a 2011 date on it :confused: ).