Ellen:
Is caching an option for you?
If I am correct, a Mosaic Dataset in an FGDB with TIF and Overview files would be considered "dynamic" and not the fastest image service web option. If you use your FGDB/MoDat to build an Image Service that uses cache tiles, you will have a fast image service and, from my experience, the cache tiles consume much less space on the server than the TIF files do.