It's certainly possible. I've used the technique in a project. What the code does is add alpha channel information from a separate to an image. Something dead simple, but would be insanely slow using imagecolorat() and imagesetpixel().
The data is a read bear to work with. The image is divided into tiles, so getting the pixel at a given set of coordinates is a little tricky.
The information about the format came entirely from looking at the source code. I don't believe there's any other documentation.
The difficulty of directly manipulating pixels in standard PHP was the motivation behind the creation of the QB extension. It lets you do this kind of work at much more reasonable speed. Normalization of pixels into floating point vectors also simplifies calculation a great deal. Might be worth your while to look into.