The generalized recursive interpolation (GRINT) algorithm was recently proposed and shown, to be the most effective progressive technique for decorrelation of still images. A nonlinear version of GRINT (MRINT) employs median filtering in a nonseparable fashion on a quincunx grid. The main advantage of both these schemes is that interpolation is performed from all error-free valves, thereby reducing the variance of interpolation errors. MRINT is embedded in a simplified version of the context-based encoder by Said & Pearlman (s&P). Coding performances of the novel context-based coder (C-MRINT) are evaluated by comparisons with GRINT, and a variety of other multiresolution lossless methods, including the original scheme by S&P. The modified scheme outperforms all the other algorithms, including the latter, especially when dealing with medical images.