I have to say you're getting some nice results there Emkay. Pictures tend to be spoiled by the horizontal banding, but I see hardly any in your latest efforts.
It's still Ilmenit's program
But it still can be optimized. What really has to be removed is the "brightness search in cost of colours", which causes the banding to get more visual. For now, the solution is to adjust the colour's levels. With C64 pictures it is rather easy, because they are already close and only 16 of them. While in "real color" pictures the amount of usable colours can vary every scanline.
Depending on the image, 80-90 colours should be possible with some slight banding.