Maybe I'm being stupid here, but why are you struggling for space?
I took the tape deck head unit and in-dash 6 disc 'channger out of my old PD150 and dropped in a single DIN head unit which I believe is what you're doing also (correct?)
The head unit in question was a Pioneer flip-out screen, and that had a massive loom, as well as a hideaway box etc, all which went behind the dash.
I had no worries at all (like I said, I was using the genuine VW pocket as well) so unless I'm misunderstanding you, I can't understand why you're having space issues - Afterall, you're removing two bits of hardware and replacing with one, you should have tonnes of space in there.
Before you go out spending money on ISO adapters and the like, make sure the permanent live and switched live wires are the right way round in your stereo loom - it may just be a simple case of swapping them round (there should be bullet connectors mid-loom). This is the one area car manufacturers can't agree on - which pin should be permanently live and which should be switched, so on different cars the wires will need to be swapped (as detailed above).
