Maybe the solution is to have a first "primary" partition, then an "under duress" partition which you'll fight tooth and nail to protect, filing every appeal possible... and if you finally do give up the key, it's filled with entirely legal but extremely embarrassing pornography, plus a few self-written Harry Potter fanfictions.
Meanwhile, whatever you're ACTUALLY trying to hide is on a third.
Sure, it's a big damn hassle, but if you're conscious enough about the stuff you're trying to hide to go with a TrueCrypt hidden volume, it'll be worth your effort.
(I'm not actually sure this is possible, but if it is, I'm sure someone else has come up with it already.)
Won't the police in the event they have compelled you to unlock your HDD check how big the partition is? If you have a 500GB disk divided by three say with the 20GB "naughty" partition, a 20GB "double-decoy" and a 460GB "decoy" partition won't the police pull the disk out, look at the label on it which says "Seagate 500GB" and say "You have 20GB left on this disk we haven't seen yet. Unlock it."?
Or is there a way in which trucrypt can hide your hidden partitions in a way that a) they don't look like randomized/encrypted data and b) it isn't obvious there is space "missing" from your disk.
Truly empty-space is indistinguishable from a secret inner volume.
See here for more information: http://www.truecrypt.org/docs/?s=hidden-volume
The software should also, when if formats the disk, leave a random area of c.5% of it free, so the police can't count up trhe size of all your partitions and figure out you're hiding something.
pulling this off would require a level of diligence most people justdonthave, andthere are easierways to hide your data.
Your ability to defend against tactics like this is 100% dependent on the size of your bank account, which, by the way, may also be compromised if the prosecutors can convince the right people that you made any money at all on your illegal activities.
This is why I am mostly blasé about things like TrueCrypt's capabilities or this particular part of the law or what-have-you. If you're doing something illegal involving a computer, you're already screwed anyway -- unless you're independently wealthy and have some serious connections.
Uh, yeah, so what?
If they have the evidence to prove you committed a crime, then they have the evidence to prove you committed a crime. It kind of makes sense that they'd, y'know, prosecute you for that crime.
They can't just arbitrarily increase your sentence based on the suspicion of another crime. There are statutory limits for the crimes they can prove, augmented by sentencing guidelines. The court cannot exceed the statutory limits, and deviations from the sentencing guidelines require a justification to be articulated. "I think you also did W" is not a valid justification.
You're always at risk of a harsh sentence for whatever crimes can be proven. If you're not prepared to take that risk, you should probably avoid committing the crimes in the first place, no?