Never, never, never use LZ77 compression for a lossy source image. If the source was
MrSID or JPEG2000 use JP2 compression (otherwise you increase image size by a factor
of 10-40 [yes, 1000% to 4000% storage increase], with no benefit).
NEAREST is most likely to increase "snow" since it doesn't try for a best fit (as a rule,
it should only be used with colormapped rasters). You need to experiment with BILINEAR
and BICUBIC (which use weighted averages of neighbors to better blend the resampled
pixels), to see which produces better pyramids with your images.
- V