Dave:
Personally I’m not a big fan of archiving the all the omfi, but that’s just me. Rather just batch digitize the media again. Then again, most of my projects, I would not be able to put all the files on a DVD. Have you tried using the archive to videotape option?
When you consolidate, first you should only have the sequence selected, then pick your target drive. Also make sure you check, “Delete original media files when done”. If you don’t do this, you have just created new clips and have the old ones as well.