yes you can do that, check ventilator's super simple filepacker.

http://www.opserver.de/ubb7/ubbthreads.php?ubb=showflat&Main=19086&Number=161374

it's basically about shifting bits according to a numeric password, and zipping things with zlib. and doing things reverse when opening files, and adding to the 3dgs's file system.
(file doesnt need to be actually exist on hdd to use with 3dgs, you can directly land your decrypted files on ram and add this to 3dgs file system. see add_buffer from manual)

you can always change the cyripting algorithm(though imo you dont even need to that) of ventilators filepacker, or add headers/more info to your pack files. since no one knows your file structure/password and cyripting algorithm, it's virtiually impossible to extract your files from there.

link: http://www.opserver.de/ubb7/ubbthreads.php?ubb=showflat&Main=19086&Number=161374

i played it around with such thing alot, if you need help about that just ask me.