How can I threshold this blurry image to make the digits as clear as possible?
In a previous post, I tried adaptively thresholding a blurry image (left)
Another option is to use region growing techniques. We give that to our students for homework, which can be found at:
http://www.cs205.org/resources/hw4.pdf
(problem 5)
The goal is to propagate information from a set of seeds. You'll still need a threshold (and in that case, you'll now have 2 thresholds to set!), but you may end up with much better results.