Unfortunately, when people start to get all specular on you and the venue is large and dark (dance halls, large clubs, or outdoor venues with no way to use ambient lighting) there's no real substitute for size. What it boils down to is a choice between glossy-looking people or dorky-looking photographer.

You can improve the pictures very slightly by using a small diffuser, but nothing that would allow you to be just a person in the crowd is going to be large enough to keep people from looking somewhat party-damaged. If you want them to look fresh, you need to use something big enough to overcome the specularity, and there's just no way to disguise something like that.

If you are there specifically to take pictures, then you probably wouldn't look too very weird with a largish softbox on a flash bracket (and by largish, I mean something like the Photoflex Litedome or the Westcott Mini Apollo, both at 12"x16"). If you're out for an evening with friends, however, they're going to have to be the sort of friends who accept you for who you are despite the unfortunate photography thing.