Here's an example of Attumen and his horse in Karazhan both alive and dead. It looks like I can make the movie files under 250kb which is good.
Alive
http://praetorianknights.com/movies/attumen1.wmv
Dead
http://praetorianknights.com/movies/attumen2.wmv
I created a backdrop 3d prop with wowmapper and then used model viewer to create my loops, and fraps'd them. Then, I imported into sony vegas studio and key removed the blue backdrops and exported a small loop area.