"And I don't think that "10.0x10.0x0.01" prim you mentioned would be the issue"
It must be the issue. Because there is a difference between shrink and stretch...
In Second Life, no prim can be less that .01 meters in any given dimension (width, length, or height).
When you try to resize an object, you often find you can't shrink it below a certain size. This is because one of the prims in the object is already at it's minimum size in one of it's dimensions.