1. A digital image acquisition device, comprising: a housing; a lens and image sensor within the housing configured for capturing digital images; a processor; a memory having stored therein code for programming the processor to perform a method of generating an output image of a scene with an extended dynamic range, wherein the method comprises: acquiring first and second digital images of approximately a same scene at first and second exposure levels, respectively; generating an adjusted version of the first digital image as an adjusted first digital image, including globally modifying the exposure level of the first digital image to approximately a same first matching exposure level as the second digital image; globally aligning the second digital image with the first or adjusted first digital image or both; generating a ghosting map based on a first threshold and absolute differences between corresponding pixels of the adjusted first digital image and the second digital image; determining one or more burnt regions of the second image using a second threshold; creating a burnt pixel map of the burnt regions; generating a blurred ghosting map, comprising blurring pixels of the ghosting map that correspond to the burnt regions in the burnt pixel map; generating an adjusted version of the second digital image as an adjusted second digital image, including globally modifying the exposure level of the second digital image to approximately a same second matching exposure level as the first digital image; alpha blending the adjusted second digital image and the first digital image based on the blurred ghosting map to generate a safe first digital image; and alpha blending the safe first digital image and the second digital image based on the burnt pixel map to create an output image.