I've been updating Deadwood; right now all of the DNS compression code is written and now I just have to go through and debug the code until it works. This should take a couple of days. Once Deadwood is able to compress DNS packets, I will change the code to store packets internally as uncompressed packets, then release Deadwood 2.4.04 with a different, incompatible format for the DNS cache written to a file (since DNS packets will be uncompressed internally).
After that, Deadwood 2.4.05 with RR rotation and TTL aging.
People can look at Deadwood here.