windows 7 - Partition has less shrink space than expected

I have a dual-boot OS setup with Windows 7 and Ubuntu.

In the picture below, (C:) 376.14 GB is Windows 7, and Recovery (D:) is 21.87 GB is its recovery partition. I'm not sure what SYSTEM 300 MB is, but I'm pretty sure it has to do with Windows 7. The 37.65 GB is Ubuntu, and I believe the 11.17 GB is its swap space. Everything is on a 480GB SSD.

I'm trying to shrink the Windows partition and extend the Ubuntu partition. From the picture, (C:) has 121 GB free space, but when I tried to shrink it on Window 7's Disk Management application, it listed only 2777 MB as available shrink space. I'm puzzled, what's causing this and how do I shrink more memory?

Edit:

Here is the Application Log for Event 259:

A volume shrink analysis was initiated on volume (C:). This event log entry details information about the last unmovable file that could limit the maximum number of reclaimable bytes.

 Diagnostic details:
 - The last unmovable file appears to be: \System Volume Information\{516e2046-e408-11e4-bb03-a0b3cc44f1e6}{3808876b-c176-4e48-b7ae-04046e6cc752}::$DATA
 - The last cluster of the file is: 0x5d57f5b
 - Shrink potential target (LCN address): 0x3fbd621
 - The NTFS file flags are: ---AD
 - Shrink phase: 


 To find more details about this file please use the "fsutil volume querycluster \\?\Volume{6de8a945-d13d-11e1-bc89-806e6f6e6963} 0x5d57f5b" command.

Here is the output of the fsutil command from above:

C:\Windows\System32>fsutil volume querycluster \\?\Volume{6de8a945-d13d-1
9-806e6f6e6963} 0x5d57f5b
Cluster 0x0000000005d57f5b used by ---AD \System Volume Information\{516e
08-11e4-bb03-a0b3cc44f1e6}{3808876b-c176-4e48-b7ae-04046e6cc752}::$DATA