Quote -  What I usually do to make it fit a smaller figure, is that I parent the dynamic cloth to the figure, then in the first frame I scale the figure down a bit (in whatever axis needed), and then have the figure be at full size again in the 'final' frame, maybe 15-20 frames up. 

Generally when working with dynamic cloth, I've find it works best to have the actual pose and character morph somewhere else than in the first frame. I usually work on frame 21 with my scene, and let the figure be completely zeroed on frame 1. That way I can pretty much control the simulation as I want. 

I think I had tried that at first, but the cloth just rescaled with the parent.  It also tended to fall out of shape by the time the caught up to it in size.

The method above has worked perfectly for me, so I decided to try to spawn a morph and use it on the original figure.  I save the newly shaped cloth as an .obj, then try to import it back onto the body actor of the original cloth figure, as an FBM, but Poser ALWAYS crashes when I try this.  Am I missing something about how the program works that won't let the obj be applied as a full body morph?