you could have skipped this step by disabling error diffusion. the bugs section of iconv(1) mentions this.
i think the main problem with the current error diffusion is that the scan always goes from left to right. a simple fix might be to alternate the scan from left-to-right then right-to-left. also, the error diffusion needs to be extended beyond 3 color channels (for example, to b&w). perhaps i don't understand the problem properly, but i think it might make sense to remove the error diffusion from jpg and friends and add it to iconv. - erik
