Never mind, I managed to figure a solution. For those who are interested though, I'll share my method here.
I extracted the LiveOS directory from the ISO, put the vmlinuz0 and initrd0.img files in there, renamed the directory to Fedora and put it in the root of my DVD. I then used the following Grub4DOS entry:
title Fedora 16 i686
kernel /Fedora/vmlinuz0 root=live:CDLABEL=CDROM livedir=/Fedora rootfstype=auto ro liveimg rhgb rd.luks=0 rd.md=0 rd.dm=0
If anyone is interested, PM me and I'll be happy to run through the entire method of making the multiboot DVD