iPhoto files compressed in Time Capsule. Where is the original size?
Find your iPhoto Library, which should be in Pictures. It's a package. Control-click on it and select Show Package Contents. You will see a Masters folder. Make a copy of that folder and all its contents by dragging it to the Desktop or anywhere you like, holding down the Option key at the same time — the green plus icon appears. If it doesn't, you're not making a copy.