1. A method for recovering missing data in a digital signal, comprising the steps of: (a) grouping non-missing data elements in at least one region in which at least some data is missing into n layers, where n is an integer greater than or equal to 1; (b) assigning an initial value to each missing data element in the at least one region; and (c) for each of the n layers (c)(1) evaluating a plurality of orthogonal transforms over layer n, (c)(2) thresholding select transform coefficients using a threshold, and (c)(3) performing an inverse transform operation to obtain intermediate results of layer n, and (c)(4) performing an averaging operation followed by a clipping operation on the intermediate results of the n layer obtained in (c)(3) to recover layer n.