A well laid out and interesting post, nice opener mate. Based on what you've said, I don't have a lot to disagree with, but i'll address some of the things you've said nonetheless. You've covered defense well and touched on some of the offense you'd be bringing to the table, however the big problem is that Godzilla is, as you pointed out, lacking in speed in comparison to Piccolo. Now, you touched off the fact that the more energy Piccolo uses, the slower he will become and thus it'll he'll be easier to tag and while rightfully so, the amount of speed that'll be reduced is negligible to take into proper consideration.
Piccolo is smart enough to play out this fight in his favor and conserve his energy wisely, his speed is a concrete advantage and he won't have to fight at his fastest because the gap is significant. Godzilla is probably able to harm Piccolo in general, but it'll be difficult in making a case in order to actually hit him. Plus, Piccolo's versatility will play out just fine and can compensate for physical disadvantages as you'll see later, so let's get started shall we?
In short GZ is insane strong. While DBZ have great durability, they are mountain busting durability at best more often than not early on, and GZ can indeed deal that sort of damage in strength. truth be told most know by feats the DBZ cast are not all that strong lift wise as striking wise, but GZ can capture and hold Piccolo pretty easy, or even pin him if given a chance.
While I agree on Godzilla possessing the superior strength and striking power, it won't exactly be a walk in the park to put Piccolo down by brute force if it ever came to a physical blow exchange. Considering how Kid Goku was able to overpower and swat away a nuclear bomb (that took apart the mountain, essentially putting his striking on that level by outkicking that amount of force) then we factor how much Goku's abilities had increased up to the 23rd Budokai, and then justifying that by Piccolo tanking these strikes from Goku in battle:
There was also a Kamehameha thrown into the equation above, but needless to say tanking Goku's best hits at that stage is credible to Piccolo's blunt force resistance and endurance, as well as tanking an extra powerful punch from Goku by using the Kamehameha as a boost:
However, the most likely scenario is that Piccolo is going to use his speed and avoid Godzilla's attacks, rather than resort to tanking them. While he is capable of doing so, it'll be pointless to disregard his speed since it's easily the best advantage he has over Big G. Despite that your case for Godzilla's speed is good, it doesn't quite meet the standards you'll need to contend with Krillin, let alone Piccolo so i'll get into that:
Now people also tend to forget just how fast a monster of GZ height compared to how fast he moves. GZ is very much Supersonic speed himself. As some people point out in calc forums, the time it take you to run 5 feet in a second is super slow to the time it takes GZ to run 50 meters in a second. by scale Gz may not look fast, but by what he accomplishes in distance to time, he is hitting mach speeds.
He only appears to be supersonic in reaction/perception speed more so than movements, but against those other dinosaurs he was easily tagged by Anguirus and he had plenty of time to dodge. Also, he didn't necessarily hit Rodan himself, he tail-smacked away Anguirus who ricocheted into him, so it wasn't really Godzilla aiming and throwing Anguiris at Rodan. Even if he is fast enough to tag a Mach 3-5 opponent, that's only low level hyper-sonic speed at best. Krillin was having a battle and short conversation with Roshi in less than a second, and Piccolo easily outpaced him:
Piccolo is also a user of the afterimage technique, which is basically an illusion created by and due to the characters' speed. It makes the opponent to think they're fighting the person when they're only attacking the image, and thus giving the user an edge. Piccolo has used this at a point blank range from Krillin's Kamehameha and appeared behind him afterwards, sending him to the ground:
A technique that'll work well on Godzilla and a counter against his AOE energy blasts. I'll save the rest of what I have for Piccolo's speed for my next post, since there's a limited number of feats available from the 23rd Budokai to the Saiyan Saga, however i'll allow you to muster up what you can against this and see if you're able to hit an opponent on massively hyper-sonic levels of speed at least, more so later against Goku. For now though, i'll follow this up with some versatility and then complete the post with energy projection, since i'd like to save the best for later and when it's needed. Piccolo's versatility is convenient up against Godzilla, and even though he already has the speed to handle the fight, he can keep read Godzilla's movements by sensing:
Initially Godzilla may have the size advantage, and if that proves to be an issue Piccolo can increase his size to either match, or arguably exceed that of Big G's. The sweet part about it is that his speed or anything else is not reduced, as he has been able to tag Goku accordingly:
If that size still doesn't change anything, Piccolo can still go further if necessary:
And Piccolo can also attack from a safe distance not only with energy beams, his limbs are also conveniently stretchable:
Godzilla will have a bunch of problems against an opponent who can match his size, avoid basically all of his attacks (and outpace him in general), plus has the ability to safely attack from distances if close quarters combat would be too dangerous. If that isn't enough and Godzilla manages to wound Piccolo, he as well Big G has the ability to regenerate, as he has done so after ripping off his own damaged arm:
That should be enough on Piccolo's versatility at least for this post, as well as his raw states he has sufficient abilities to handle and counteract most of what Godzilla can dish out at him, and can eliminate any size advantage if need be. However, Piccolo won't be able to do much than stall with these abilities now will he? The speed and power he'll be striking Godzilla at will only get so far, that's where his energy projection comes in.
Piccolo has destroyed mountains with mediocre energy blasts:
And at a tiresome and weak state, Piccolo' put most of his remaining energy into a single explosive wave blast and succeeded in taking apart the surface of the island they were battling on. If at this point and he was at his full power, he'd be capable of doing a lot more. Either way, this amount of power succeeds the basic nuclear output that Godzilla is used to tanking, and with focused energy beams, Piccolo will be inflicting some damage:
That should clear up the jist of what Piccolo is bringing to the table against Big G mostly in speed, energy projection and versatility. Piccolo has handled the best hits Goku could dish out and several Kamehameha's too, so his durability will be good enough to stand up to a good portion of Godzilla's offense, but if he manages to tag Piccolo, that is. Anyway, i'll leave it at this and I look forward to your response mate, your move ;)