from 120 down to 35 is a bit of jump drew, i think that as others have suggested maybe something in between the two might be a good iea. i used to use a PLCE bergen (120litres i think) for single nights out, these days i can get away with a shoulder bag and a bed-roll and be just as comfortable (if not more so) as i was with all the kit in the world. but as well as about 3stone and maybe 90litres difference there's also a good ten years between the two. don't try to go from one extreme to the other would be my advice, lose one item at a time from your pack until you can do away with the side pockets, once you've managed that you'll be down to 100litres. after that you can find an 80litres rucksack that you can add your bergan side pockets to so that you can bring it up to 100litres, then simply start again, lose one item at a time until you don't need the side pockets then you'll be down to 80litres, repeat.
IMHO (and i fully expect that the tree swingers will tell me i'm wrong here) 35litres is probably unatainable with hammock/tarp/underquilt/sleeping bag/blanket/gear hammock/enough cord to rig a tall ship/84 carabiners/all the shock cord in the western world etc. (did i miss anything that's essential to hammocking?). much easier with sleeping bag/bivi bag/tarp
stuart