Edit: ok it does do greyscale you just have to check the option box so i dont see why it wouldnt work

hello not sure if anyone else knows about tho im sure they might. but serarching the web i came across a pretty nice terrain editor and generator. to my knowledge its free for any use tho u may want to contact the creator to be sure if your working on a commercial project. I did not make this or have no knowledge of this program other then its existance so please dont ask me for help cause i wouldnt have no clue on what to do just hoping it may come usefull to someone. it has some good points from what im seeing but some negatives as well. it exports to bmp or hmp but the hmp wont load into med. i guess its another format. i dont know much about terrain. anyways heres the link
height map editor sorry if this has been posted before but its the first time i came across it

EDIT:: btw it uses color height maps and not grey scale not sure how well 3dgs is with color maps or if the colors are used correctly in the program or whatever so this may cause i problem havent messed with it much as i just found it. but on an upside if this does work its kind of cool cause it allows you to create prefabs and load them in over existing terrains like rivers and mountains and what not. i really hope this works with 3dgs ill post more if i find out