After playing with this some more using a larger image, there was incorrect interference with the whole object at once method, regardless of the order of backfills. So I guess we go back to splitting the image up by sections slightly smaller than the phase.
In this example, it almost worked, but the head cuts out from the arm where it overlaps.
By the way, this is my favorite TUT ever. (only been using PDN for about two months now, but this one was enough to make me want to register for the forums!)