I did.

  • launch Automator
  • create a new Service
  • add a Shell-script task
  • make sure input is passed as arguments (not stdin)
  • paste this code:
    
    DVDDIR=$1
    OUTDIR=`dirname "$DVDDIR"`
    DVDNAME=`basename "$DVDDIR"`
    hdiutil makehybrid -udf -udf-volume-name "$DVDNAME" -o "$OUTDIR/$DVDNAME.iso" "$DVDDIR"
    
    

At the end, you should have something like this (mine’s in Dutch, sorry):

Save the workflow, and you should have a new item in your context menu.