partition 1TB C drive - can only shrink to 400GB

[as_sass]

Folks,

BACKGROUND:
I just purchased a W530 with a 1TB HDD, running Windows 7 64 bit.
I was hoping to partition the C drive by shrinking it to 200 GB (for Windows + program & system files), leaving me around 750 GB for a new partition of data, media, etc.
I have never partitioned my drive before, but I know it is good practice.
Also, I typically encrypt my drive with bitlocker (incl. in Windows Ultimate).
Encrypting the drive with the OS on it is a pain (as it frequently asks for the recovery key on start up).
Thus my hope of creating a new partition and encrypting only that partition.

PROBLEM:
I am sure you have heard this before, as googling this problem resulted in quite a few hits, but no workable solution:
When I try to partition, my 1TB drive can only be shrunk to make room for a new 400GB partition.
That is obviously not acceptable.
The issue occurs because important system files are located "halfway" on the HD.
I have tried the commonly suggested solutions (disable hibernate, delete system restore and paging file, defrag).
Still no change.

AIM:
My idea is to do a factory reset WITHOUT installing windows.
Then partition the drive, then reinstalling windows.
Then move user directory to new partition (I know this is complicated, but I think I found a solution for that).
Then encrypt new partition with use directory using bitlocker.

QUESTION:
I know how to do a factory reset using F11.
But how do I do a reset/wipe without installing windows?
Also, where do I get the windows install file? I tried creating a boot & backup media using a USB stick and the lenovo tools - but I am not sure how that would enable me to install windows.

Any help is appreciated - thanks so much!
As

[ganon11000]

Connect the HDD to another computer and use mini tool partition wizard to shrink it. As its connected to another computer and not being used all files will be movable!

[jayton4]

It sounds like you need to be introduced to Parted Magic. It can do a lot of these things you are asking, shrinking partitions, wiping a partition, etc. It is a very valuable tool. You can download it by itself and burn to disc, or you can download Hiren's Boot CD which includes Parted Magic and a ton of other utilities.