If anyone is interested, its an AppleScript application called Disk Image Maker, available here:
It lets you create disk images from folders and it lets you convert existing disk images. You can get the compression format (or no compression), and you can choose to encrypt the disk image. You can run it by dropping things on to it, or by simply double clicking it.
I’ve had lots of disk image creation and conversion programs over the years. Every last one gets abandoned and eventually stops working. So I figured I’d just create my own using AppleScript and hopefully it will keep working forever. 
If you try it out, let me know if you find any bugs in it. I’ve debugged the hell out of it so hopefully its clean. Also it would be good practice for you to review the source code real quick to confirm that the script does nothing at all with the password you create, other than use it to encrypt the disk images.