Check out UCNV’s incredible The Art of PNG Glitch page for a deep look at how to make glitch artwork from PNG images. UCNV dissects the PNG format and finds places to insert unexpected data that causes images to render in new and interesting ways. The result is a very organic and chaotic distortion to images, something that would be difficult to do by hand. Check out the page for all the details and links to Ruby code to perform your own PNG glitches–great work!
Distorted Lena image above from UCNV.