In case you want to try a 8bit heightmap with the shader terrain mesh (which only supports 16bit), here’s a small script to convert the heightmap to 16bit, just drag the file onto it or use "python script.py ":
import sys
from panda3d.core import PNMImage
if __name__ == "__main__":
fname = sys.argv[1]
img = PNMImage(fname)
size = min(img.get_x_size(), img.get_y_size())
dest = PNMImage(size, size, 1, 2**16 - 1)
for x in range(size):
for y in range(size):
dest.set_gray(x, y, img.get_gray(x, y))
new_name = fname.split(".")[0] + "-16bit.png"
dest.write(new_name)