Link’s Awakening disassembly progress report – week 5
The rooms' data compression remind me of the Pokémon sprites during battles in Pokémon Gen I/II (Red/Blue(/green) and G/S/Y). As I remember it, the in-battle sprites (which are fairly large) are "compressed" using a custom algorithm. IIRC, it does RLE, and has some facilities for doing dithering, which was used in a lot of the sprites to give the impression of more color depth than there actually was. And they were only 4-bit (white, black, and two colors) in G/S/Y!