Have you looked at Hugin? I know it is used for similar things:

http://wiki.openstreetmap.org/wiki/Vertical_Aerial_Photographs
http://www.mail-archive.com/[email protected]/msg11990.html

and a more generic tutorial for hugin:
http://hugin.sourceforge.net/tutorials/Mosaic-mode/en.shtml

-Rob A>
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