Daphne does not seem to have a public source repository. Instead they offer a [url=http://www.daphne-emu.com/download/daphne-1.0-src.tar.bz2] GPL’ed tarball [/url] of the most recent official release source.
Yes, I’ve chatted with “Matt_O|zn” in their IRC channel and I have their blessing to publicly patch the source for Raspberry Pi. Their private source isn’t in a state right now to share or patch.
The original laserdisc images can be large, yes! But daphne only expects an ogg file for audio and a m2v for video. Both could be compressed down to a smaller size, if desired. I haven’t tried this – I’m assuming.
I can also find exact laserdisc rips on YouTube right now.
Probably worth mentioning – there are also easily google-able ways to produce a Daphne video from a matching PC-CDROM or DVD game disc. :)