Using Photoshop and TESAnnwyn I am trying to create a large 4-cell worldspace. So far I have been using http://hoddminir.blogspot.nl/2012/02/from-heightmap-to-worldspace-in-skyrim.html and I didn't think I'd have many problems with it. I've drawn a small part of the worldspace in the center of the 4096x4096 image, mainly for testing purposes.
I have used multiple shades ranging from 70% to 96% so I could get an idea of the sizes of the hills I would generate. After I was done I dropped the brightness down so the brightest part of the image was 79%. Then I merged the layers, flipped the image vertical like in the tutorial, exported it as a .raw, Header 0 and IBM-PC. I skipped the whole GeoControl editing as this was merely a test and it didn't need any detailing for now.

I placed my heightmap.raw inside the TESAnnwyn folder where you'll find the .exe, then started the command prompt.
I tried three slightly different prompts:

TESAnnwyn.exe -i Skyrim -p 1 -b 16 -d 4096x4096  -x -64 -y -64 -h -22192 -w MyZoneName heightmap.rawTESAnnwyn.exe -i Skyrim -p 1 -b 16 -d 4096x4096 –s 0.15 -x -64 -y -64 -h -18096 -w MyZoneName heightmap.rawTESAnnwyn.exe -i Skyrim -p 1 -b 16 -d 4096x4096 –s 0.8 -x -64 -y -64 -h -18096 -w MyZoneName heightmap.raw

The first is according to the tutorial above, in the second and third approach I've added the '-s' I saw on the Creationkit wiki, it thought it was plausible that my heightmap was too dark as I didn't have any mountains and everything was just above sealevel.

When TesAnnwyn was done, I placed the tesanwynn.esp into my Data folder and loaded Ck. I added Skyrim.esm to the loadorder and set TesAnnwyn as my active file.
I've checked all three exported heightmaps in the Creationkit, in all of them the cells I edited were completely flat, the heightmap editor in the CK showed me a whole image with just one shade of green.

I seem to be the only one having this issue, so I'm almost 100% that I'm doing something wrong, even though I followed the tutorial to the letter.

Other details:
I am running the CK Version Control and I didn't copy my file to the Merge folder as I didn't see any need to, I didn't want to merge anything in it and only wanted to see if it was working.

What does TESAnnwyn report once it has created the .esp file? Any over-/underflows or other errors?

Nothing as far as I can see, only that the export was succesfull.

With the following command:

TESAnnwyn.exe -i Skyrim -p 1 -b 16 -d 4096x4096 –s 0.1 -x -64 -y -64 -h -18096 -w MyZoneName Heightmap.raw

I get this as final result:

All kinds of coordinates for the heightmapNow Assembling Optimized CELL groups ...Highest point is -2262 THU (-18096 Game Units) = -257.868000 metres [Cell (-64, -64)]Lowest point is -2262 THU (-18096 Game Units) = -257.868000 metres [Cell (-64, -64)]Total number of cells imported: 16384Finished! The imported ESP is called tesannwyn.esp and is 128 cells by 128 cells.

As you can see, there is something wrong with either the conversion from my image to a raw or the raw isn't properly read.
Not sure where the problem lies, as I did exactly the same thing as the tutorials.

Can you upload the heightmap image?

I'm not sure if I can upload a .raw on Tinyurl, so I hope this JPG will do. The highest colour value is 81%, the lowest 95%, I wanted the 95% as sea level so I have some stuff below for ocean floors.

EDIT: Tinypic shrinks the image, I'll upload the full images on Nexus in a moment.
EDIT 2: Here is a zip with the files, I've added 3 files in it: A .JPG and 2 .raw files. One .raw is exported in Interleaved and the other non-interleaved, didn't know which option to pick, tests have been done with the Interleaved option. The images are flipped and checked for the correct colour ranges.
http://skyrim.nexusmods.com/download/97574

Have you seen this tutorial: http://forums.nexusmods.com/index.php?/topic/809556-from-l3dt-to-skyrim-heightmap-tutorial/
Maybe between that and the one you are using, you will get a insight as to what the issue is. I used this tut to successfully make a worldspace. I think the only limitation on it is the free version of L3DT has a map size limit.

But L3DT or GeoControl shouldn't be necessary unless you want more detail in your maps, or does the program store the heightmap details somewhere other than the RGB channel?

A quick test with the non-interleaved raw file resulted in a lot of over- and underflow errors. The scale factor had to be set to 0.0135 or lower in order to not get any errors. If the scale was set to 0.0135, then the difference between highest and lowest point was about 26 meters (which is probably a lot less than you were hoping for). Based on how the JPG looks I think your problem may be the difference in grayscale values used to paint the areas. The difference in shades of gray at the boundaries is simply too big, there needs to be a smoother transition. The boundaries are creating tall vertical cliffs without smooth transitions from horizontal ground.

Oke, so apparently I needed to use the non-interleaved raw file, as my previous attempts were all with the interleaved option enabled, guess this should be added to the wiki (Didn't see it mentioned). With the boundaries I take it you mean the 80% white walls at the north side of the island (the lower part of the flipped image), because I hope that the 2% differences between some of the layers isn't too big. Could I fix this in Geocontrol or L3DT or should I just make them fade more smoothly using photoshop?

By boundaries I mean most, if not all, of the changes in shades of gray in the files you put up on Nexus. Have a look at http://skyrim.nexusmods.com/mods/19168/?tab=3&navtag=%2Fajax%2Fmodimages%2F%3Fuser%3D0%26id%3D19168. Pay attention to how gradual the transitions between different elevations are. That is how much detail is needed, if you want to avoid having to fix it manually in CK. The heightmap of Hoddminir (hosted on Nexus) would be a good thing to have a look at, but the compressed archive containing the raw file is about 560MB.

You could fix the issue with software like GeoControl, L3DT or World Machine. I'm most familiar with World Machine and using that I would use the heightmap as the input and then apply some sort of erosion to get a more realistic smooth terrain. A similar approach probably applies to the other pieces of software. If you want to have cliffs in your terrain, you will probably have to do it with statics and not the heightmap.

Oke, I'll fix them up a bit in Photoshop first, then going to edit them in GeoControl, World Machine and L3DT's trials have a limit on the max resolution it can export so I probably can't use them. The height maps I created were merely for setting the layout, I intended to clean them up in either CK or another program afterwards.

You could export it in separate quadrants (or some larger set of areas) and blend the seams in photoshop?

I managed to reduce the amount of tearing a bit by reducing the height differences to an acceptable amount. I tried using GeoControl but couldn't find a good way to keep the overal shape of the heightmap but with smoothed edges between the slopes. I thought these programs behaved more like Mudbox with brushes you could use for smoothing and drawing the slopes.