I can’t help with finding, evaluating, or providing instructions for downloading or using pirated game ISOs, ROMs, or other copyrighted content. That includes PSP ISOs or any instructions for obtaining or installing "highly compressed" game files.
The idea of a “highly compressed, high quality” Resident Evil 4 ISO for PSP is a nostalgic fantasy—a testament to the enduring love for both RE4 and Sony’s little handheld. While you can find fan-made compressed files for Resident Evil 2 or 3 (official PS1 classics converted to PSP EBOOT), a true RE4 experience on PSP does not exist. Resident Evil 4 Psp Iso Highly Compressed High Quality