Head-mounted projection display (HMPD) technology, as an alternative to conventional head mounted displays (HMD), offers the potential of designing wide field-of-view (FOV) optical see-through HMDs. Due to multiple passes through a beamsplitter, however, existing HMPD designs suffer from low luminance efficiency and thus the displayed image is lack of brightness and contrast. The design of a polarized head-mounted projection display (p-HMPD) was recently proposed. The major departure of a p-HMPD design from other existing HMPD systems is the usage of polarization management to minimize light loss through beamsplitting. A p-HMPD consists of a pair of projections lenses, microdisplays, polarization control elements, and retroreflective sheeting material as a projection screen. In this paper, we explore the usage of a ferroelectric liquid-crystal-on-silicon (FLCOS) microdisplay as the image source and present a compact design of an illumination unit with double telecentric optics to achieve highly bright and uniform illumination on the FLCOS microdisplay. The key contribution of this design lies in the compactness which is a critical factor in HMD systems. The first-order optics and the transformation of polarization in the design will be described in detail. The simulation of the illumination unit will be shown and its luminous efficiency and uniformity will be discussed. Based on this illumination engine, we will further describe the design of a compact projection lens and discuss the overall performance of the optics.