couple random thoughts or questions...
1. i'm too lazy to look back at who asked about 1d pictures, and who asked about encoding music, but here's an idea. you could think of music as a 1d picture (i guess grayscale 16 bit or 24 bit??), or you could try to intelligently choose a 2d picture where each row (or column, depending on what compresses better) represents X measures of the music (where X depends on the meter). since most music is at least slightly repetitive, that would give you some 2d correlations which FLIF might better compress.
also, you may hit me [gently] over the head if someone else said this xor it doesn't work out.
2. definitely looking forward to a paper on it, so i can maybe see a simple walk-through of how it encodes/decodes stuff. i'm working a bit through the code itself, but i'd rather read things more carefully when the format's fixed. though with my possible use-case (decoding images on the bitbox, using 15bit color, 5 bits each color plane), i'd probably be writing the encoder/decoder, so i'd have control over the format anyway. but any idea on when the format will be finalized? from github it seems like you were hoping this year.
3. for the bitbox, i need to race the beam to draw a decent resolution image, but i can work with a couple rows at a time, e.g. if row y's pixels depend on a handful of rows e.g. (y-2, y-1, y+1, y+2), i.e. information encoded for those rows. is it possible to decode a flif image in this way, i.e. line by line, or are there effects from far-away rows (or all other rows) that need to be considered?