I've had some success but I'm still having trouble.
I got one of my games (Neo Race) to work. Which suggests that I am doing it correctly. But I still get an 80029533 error with my other homebrew (I've tried That Other Space Shooter and Cubicle Shooter). They all worked fine when I was using a 3.41 jailbroken PS3 so there isn't anything wrong with the actual brew that I'm trying to sign. There is also nothing wrong with the packaging of them or their SFOs or anything else that I'm using with them. They install fine and if I use the eboot from Neo Race it will run fine. There is nothing unique about Neo Race that would explain it working and the others not. As far as I can tell Geohots tools just arbitrarily don't work in certain situations.
BTW I'm now using $n!pR's PKG Toolkit GUI for convenience now if that matters. I don't have any more success just using Geohot's tools on their own in the command line.
Also it turns out that its totally normal for the file sizes to be smaller.
If anybody here has been having repeated success signing things then I would greatly appreciate it if you would be willing to try and sign some homebrew for me. Obviously I would prefer to get it working for myself so I can do it without needing to depend on anyone. But it would be nice to see if anybody else CAN get it working or if the tools are just busted.