This sounds normal, depending on your setup.
What sort of disk type are you using? (Monolithic or split? Sparse or Preallocated?)
When using Split disks (2GB chunks) in a Sparse fasion (as opposed to pre-allocating) the file sizes of the actual VM's will only be as large as is required by the guest OS.
When more space is needed, new 'splits' are created and the vmwarevm grows in size to accomodate this.
If you're using a monolithic disk (one big vmdk file),Fusion needs to be able to duplicate the total ammount of space on the drive to re-size it, so if you don't have another 80GB free i can see it not allowing you to do this.
I'm assuming a few things based on your setup, but I'm fairly certain that's what's going on here.
Let me know if this answers it for you =)
Also,
See: Virtual Machine Settings > Disk Type
http://communities.vmware.com/docs/DOC-1110