Source encoding for digital image transmission is revisited with an energy distribution approach in the perceptual domain. Past investigations have utilized power spectral density in conjunction with the Frei eye model and full image Fourier transform coding. In this investigation, the cosine transform is utilized on a partitioned image. A cosine energy function is defined and weighted by the eye model. This results in a circular symmetric form of a bit map which simplifies source coding. This approach outperforms a standard bit allocation procedure allowing graceful degradation at 1, .75, and .5 bits/pixel. Analysis includes the perceptual mean square error and peak signal-to-noise ratio as metrics of performance. This procedure suggests a more rapid hardware implementation.