Step 1: Using Heightfield
First, in Rhino, enter "heightfield" into the command bar. It will prompt you to open an image file, and then prompt you to place the image on the C plane. This is fairly basic-you make the bounding rectangle as large as you want your resulting image to be.
A dialogue box will pop up, (Image 1) asking number of sample points, height, and how to create the surface. Sample points are exactly what they mean-the more sample points, the more detailed your model will be. Height is again, how tall your object will be. The difference between "control points at sample locations" and "interpolate surface through samples" is the amount of detail you get in your heightfield. In the image I posted (Image 2), I made some examples, using one of my own MRIs. As you can see, lower resolution and control points results in a very low, soft surface, while a high resolution and a surface that is interpolated results in a surface that is extremely detailed and jagged. For topo/contour purposes, I find that the control point method is ideal.
Step 2: Contours
To create contours, simply use the 'contour' command in the command line.
We'll start out again with the heightfield of the shoulder MRI. Select the heightfield, and type in 'contour.' Some prompts come up in the command line. First, select your contour plane base point. Click to make a point below your surface, or at the very base of your surface. This is where the contours will begin.
Then, when prompted, select the direction perpendicular to the contour planes. If you want your contours to be perpendicular to the C plane, click along the bottom of your surface and then, while holding 'shift', click some point above your surface. This makes your selected direction exactly perpendicular to your surface. (Image 2) If you want contours that are diagonal to your surface, this is where you can set that as well.
Your contours are created! (Images 3 & 4)
To flatten the contours to create a topo image, select them and command "ProjectToCPlane" and the lines are now all on the the C Plane, ready to be milled, drawn, or laser-cut!
Step 3: Examples
Image 2 - A laser cutter using the topo lines as cutting lines, of my spine
Image 3 - Wood laser-etched with an MRI of my spine