This web utility seems like exactly what you’re describing. I think this was a small app someone made for themselves while developing a game for Playdate. The source might be available on their Github. If not they seem friendly, you could ask for it.
yes I’m looking for C algorithms for that. I just searched for “1bit old-school image”
Search for Floyd Steinberg dithering. That’s the algorithm used by a lot of classic Mac software.
This web utility seems like exactly what you’re describing. I think this was a small app someone made for themselves while developing a game for Playdate. The source might be available on their Github. If not they seem friendly, you could ask for it.