Method and system embodiments of the present invention are directed to restoration of corrupted images using spatial-domain image-processing methods that can effectively employ spatial-domain information both in order to avoid various types of artifacts and distortions produced by frequency-domain image-processing operations and to achieve computational efficiency. The various method and system embodiments of the present invention employ a family of penalty functions to constrain iterative restoration images corrupted by both deterministic corruptions, such as motion-induced blur and blurring due to optical misalignment, incorrect positioning of optical components, and defective optical components as well as essentially non-deterministic noise corruption introduced at various stages of image acquisition, image encoding, image storage, and image transmission.