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I wanted to build a larger garage but lot size, setback requirements and anything over 500 SF required a grading permit from the town. That permit would have required delineating wetlands and a stream encroachment line. I was not going to do that extra work so I scaled the project down to 484 SF. I plan on having a workbench. All stationary equipment will be along the wall that has the man door. The door opens in creating a three-foot wide "dead" area that could not be used for anything except workbench, compresor, etc.
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I am in the middle of an almost identical project... and was limited to size for many of the same reasons you noted... Mine's slightly bigger, at 24x24, but its still smaller than I'd like. It IS nice to not have to worry about inspectors, etc. coming around all the time watching me smack my thumb with a hammer.
I also plan to have a workbench on the man door side, which in my case is the back of the garage, opposite of the overhead doors. I put 3/4" plywood inside the trusses and drop down stairs so I can utilize every square inch above me for storing all sorts of junk, wheels, tires, etc. up and out of the way... I hope to have it finished before the snow flies...