in memory image manipulation

I was wondering if there is a way (with out writing an extension) to dynamically alter an image associated with an active object? Kind of like using the draw extension, but have the target the current image of an active object, or the transparent image in an alpha channel object, instead of the background layer.

Thanks in advance!

Overlay + ActiveOverlay sounds like what you're after. Overlay is like a new and better draw object, "active overlay" displays it as an active object instead of a backdrop.