With Windows imaging you must reimage to a HDD at least as large as the initial HDD. This has nothing to do with how much data you are imaging.
The reason is that Windows always replace the Master Boot Record (MBR). This contains the partition table for the original HDD (a 500GB drive). Windows is saying there is no suitable HDD to reimage to.
If you post a full Disk Management screen shot of your 500GB HDD we can guide you through how to do it. It would be best to use something like free Macrium Reflect.