well I think he'd make a good Chancellor!
Embroidery.
Several years back a lady asked me to help with converting images to a more "blocky" format (and 16~32 colours) for doing company logo's etc (on jackets/caps).
I altered the settings on a plug-in previously modified to simplify images for raw comic/cartoon outlines. The original plug-in was one of the Unplugged freebies.
I have been playing with it tonight and think it should serve your purposes - although designed for Paint Shop Pro (4 > 7). It works OK on Adobe.
You might have to run "edge enhance" first (PSP or Photo Shop), before running my modified plug-in, if you are working on an image with 256 to 1.6 Million colours (eg. Jpegs, BMP, PCX, etc.).
Depends on how many thread colours you're intending. If run on its own, you're down to 8~12 colours in its pre-set configuration (very basic & strong colours/relief): however if you run edge-enhance (filter) first, it actually reduces the strength of the base relief and allows about 40 thread colours (I did not actually count each pixel - so that is a close guess).
... Anyway - it should work.
Let me know if you want it. I'll send it to Chancellor Heim or mail it to you directly. It is a free-standing filter/plug-in. You just put it in your Plug-in or Filters folder (inside C:\Program Files\Adobe\PhotoShop\...) ... and then it is auto-detected/auto-run when selected.
Name? I spent months thinking what to call a revised plug-in for making comic outlines. Is called (wait for it) ...
'rix comic'
Cheers,
Rick.
rix@multiline.com.au