Depends on your derailleur....XT and XTR u can buy replacement cage plates in your choice of length(long,mid or short) as well as some Sram derailleurs. Check with your LBS....
really, unless you change it out for a new, proper cage, it cant be done safely or effectively. So you better hope you can get a replacement cage, and that the cage is held on with allen bolts or the like. If its riveted on, forget about it.
I actually managed to shorten up the cage on an X-0, but I had a "donor" X-0 as well. So assuming your running sram, and its new enough, and expensive enough it may be do-able.
You can swap pretty much any pre-2006 shimano cage and derailleur. I had a XT with a 105 cage that worked amazingly well. I had torn off the cage on my XT and found a 105 with a cracked P-knuckle in the trash.
I Also managed to build a 1st gen XTR with a old (600?) shimano road cage. Din't work super good beacause of the 7spd design, but it had a defenitive novelty value to it...
I wouldnt cut and drill a cage.. you'll never get it perfect and those bolts sticking out will snag more rocks than the general lengh of the old cage.
If you REALLLLLY wanted to shorten the cage, and not just get a different cage or a different derailleur you could always cut the cage, take however much you want out and weld it back together, it wouldn't work well since the cage metal isn't the same width all the way down, but w/e it's you bike, I wouldn't do it if I were you though.
And like cubed said, if you shorten it too much you might not be able to reach all the gears on your cassette.