imann,
thank you. and thanks, syd
i started by using a new plugin that was made by folks on this site, stroker, cameraken, byro and myself. it divides the grays into 32 bands and allows you to darken or lighten each band. i selected different regions of the image and worked on each with the plugin, taking down the highs on her forehead, darkening the fading on her dress, taking out the spots in the background and so on. even the neck/chest and face were done. this, by itself, took out some of the blotches.
the rest was mostly done using the push tool to smooth a few transitions the plugin didnt get.
after that, i set a blend mode on the layer (i forget which now) to blend with the original background layer. this gave me a nice black and white. there was also a curves adjustment layer and a contrast/brightness adjustment layer. these were needed to bring back a little contrast, mostly to her face where the plugin had made it a bit too pasty.
copy merge and paste to new layer.
then the painting. new blank layer above the copy merge. airbrushed in some tones to get a reasonable skin color and then added a manual color correction to this. set another blend mode to lower the saturation a bit and tweak it to a sort of 50's studio print painting. erased where the eyes are and the lips (remember, this is the airbrushed layer, so we want to remove any stray airbrushing from those areas). hand painted the lips and eyes. hope they are blue
that's the basics of it. there were lots of little steps and to try to write that all up would take longer than the fixing of the image.
not quite sure where you're seeing all these splotches. i did do some hand work on the neck/chest and face to try to smooth all that out, mostly with the push tool. but if you feel there's still some there, a light smudge would probably handle it nicely.
there are other ways to fix the original besides this 32 band gray plugin. i mostly wanted to see if the thing actually worked well enough to use as a retouching tool.
and there are others here who do colorizing far better than me. i think i went a bit too light on the application of paint. and if you're interested, i'm sure there are tutorials on how to do this.
so, glad you like it
craig