These can be displayed using 3 VGA drivers that have been modified to be synced (as close as possible) to each other.  The bitmap data is really three 2-bit bitmaps, one each for red, blue, and green components.  Each VGA driver does one of red, blue, or green channels.

You can input any image into this Windows App, but the largest image that can be stored in the 32 kB of main Prop ram is about 224x160 pixels (14x10 of 16x16 pixel tiles).  You probably will want to resize both x and y dimensions to be a multiple of 16. 

For the best result, load the image into Adobe Acrobat and do Image->Mode->Indexed Color and select Uniform palette with 64 colors with diffusion dithering.

Examples:

Here's the Propeller test code and data for 3 images

Here's an example source image with lots of color that I've shrunk to a reasonable size:

Here's what it looks like after Photoshop processing and clipping:

 

And, here's what it looks like on the VGA monitor:

   The levels aren't exactly right...  But, not too bad.