Based on Taito 1987 coin-op.
John Cummings used STOS BASIC to create mapper utility for building Rainbow Islands backgrounds. He also coded an IFF interpreter with STOS to convert original graphics sent by Taito. These graphics were then converted to NEOchrome's format for further processing. (Source: The One issue 6)
Rainbow Islands almost was one those games that never saw the light due a disagreement in licencing with Taito. Game wasn't finished in time so Taito saw that the agreement was over. They also claimed that they now own the homeconversion code.
Graftgold weren't too happy about that because game was developed by their OOPS! development system and refused to give any code to Taito. Fortunately the situation has cleared when Microprose bought three British Telecom's software labels and eventually got the rights to publish the game. (source: The One issue 15 (dec 1989).