In this pilot study, we use data from the First Large Absorption Survey in HI (FLASH) to search for redshifted HI 21 cm absorption at 0.4 < z < 1 towards 157 bright radio sources with Interplanetary Scintillation (IPS) measurements at 820 MHz in a single field observed with the Australian Square Kilometre Array Pathfinder (ASKAP) radio telescope. The ASKAP IPS measurements, which use only 2.5 minutes of observing time in total, allow us to estimate the compactness of these radio sources on sub-arcsecond scales at a frequency within the 712–1000 MHz FLASH band. In particular, the Normalised Scintillation Index (NSI) for each source reflects the fraction of the flux density arising from compact components less than 0.1 arcsec in diameter. We find that 18 ± 5% of ASKAP sources with flux densities above 150 mJy are highly compact with NSI ≥ 0.8 – implying that at least 80% of their radio emission arises from a single region smaller than about 800 pc in size. The compactness of these sources makes them ideal probes for an HI absorption search, since the covering factor for any HI gas clouds along the line of sight is likely to be high. About half of the sources with NSI ≥ 0.8 also have peaked radio spectral energy distributions (SEDs), consistent with previous IPS studies at lower frequencies. These pilot results imply that IPS measurements with ASKAP can provide a simple and powerful tool for identifying uniform samples of compact radio sources at frequencies of a few hundred MHz across large areas of sky. With FLASH, we detect two new HI absorption lines against compact sources in the ∼ 30 deg2 region of sky covered by the IPS data; an associated HI line at redshift z = 0.9540 (with a matching optical redshift) in MRC 2125-237 (NSI = 0.98), and a likely intervening line at z = 0.4632 towards MRC 2131-241 (NSI = 0.84). The radio sources with these two detections are both bright and compact, with peaked radio SEDs.