Hi Thomas.
Contig can't find one big contiguous fragment of 820Mb available in your 130Gb free. In this scenario suggest you take domino off-line and use the windows defrag.exe on Domino data partition to increase the amount of contigous free space you have. Contig simply uses the contigous free space available for the file at the time its processing. It doesn't then optimise for other future writes,
If your had VerboseLogging turned on in this scenario for example you might see 1000 fragments before and 20 fragments after for the 820Mb file. So it's not the fact you've got 130Gb space available, it's how much contigous space is available which in this case wasn't 820Mb.