Bob Powell said:
Unfortunately the 16 bit image formats in GDI+ are all broken.
You will have to open the image, read it byte for byte and then write it to
a newly created image, perhaps a GIF in your case.
See the GDI+ FAQ for info on the LockBits method which will be essential and
the GIF palette article which will enable you to create a custom monochrome
palette.
I'm suspicious of a recommendation to use LockBits and read it byte
for byte. (But also I didn't understand the original question).
Bob, you say that the 16 bit formats are broken. Does that suggest
that the 32bit formats work, and that the original poster could have
done what they wanted if it were 32bit rather than 16bit?
If so, a better answer would be to use BitBlt to convert the 16bit
image to 32bit, and then go from there. After all, 16->32bit
conversions are already built into Windows and are very fast.