This detail is buried in kacir's post above
but I glossed over it repeatedly. After messing around with images in gimp for the last couple of months trying to make my own boot logos, I finally got the missing piece figured out: you need to use color-indexed bmp files
In image magick, do 'convert FILENAME.bmp -colors 256 FILENAME.bmp' for each image using RGB space. In gimp, goto Image > Mode > Indexed (256) to do the same thing. I haven't tried 4 or 16 color indexes, as the working files I was looking at for comparison use 256 colors in their indexes. Also, I haven't tried saving from gimp to 16bit bmp.
I've been working with photos scanned from magazines as my source. This workflow I've developed allows me to keep the contrast of the image, retaining contrast and highlights, without losing as much detail as I would if I did a commandline conversion.
1) Crop original image to center the subject
2) Image > Scale [600x800 / 96x96 resolution, you may need to play with (un)locking x and y operations. Also, you can use the Scale tool to scale the selection in a single direction]
3) select the part of the newly scaled image I want to use via Path tool
4) copy selection to a new transparent layer
5) Image > Mode > Grayscale
6) Colors > levels [adjust so the black is just inside the left tail of the histogram, white is just inside the right tail of the histogram, and adjust grey to the middle of the "hump" in the histogram]. This requires some eyeballing and aesthetic jugement.
7) Create a new layer underneath the selection, either white or black depending on the dominant color of the selection
8) Merge selection and solid layer you just created
9) Colors > posterize 
10) Colors > levels [fine tune the pointers to bring back any details you may have lost]
11) Image > Mode > Indexed 
12) Save As > FILENAME.bmp [24bit]