The rumor that the problem with GTA4 is that it doesn't fit on a DVD9 and some kind of advanced compression tech is expected to be supplied by Microsoft.
What I find implausible in it? This supposed advanced compression tech is either ready and working, in which case it can probably be applied to the game assets for maybe a month (if everything needs to be manually reviewed to set a compression level per-asset), which would not be a reason for a 6-month delay, OR it must be still in the labs - in which case it would be unclear if it would EVER do the job, even after a 6-month delay.
Besides, Rockstar are experienced console developers - people who know how to work on a memory/disc budget. They knew they were targeting the 360 all the time. There's no way a team such as this would suddenly go "oops??? we overshot, the game is 18 Gigs now, call the MS compression ninjas".