1. A method for de-blending seismic data associated with a subsurface of the earth, the method comprising: receiving seismic data “d” that includes shot recordings generated by plural sources that are simultaneously actuated; forming either a continuous receiver trace or trace segments from the received seismic data; selecting plural overlapping spatial blocks that cover shot locations of the plural sources; assigning the shot recordings to the plural overlapping spatial blocks; determining a linear de-blended model “m” of the seismic data by reverse transforming tau-px-py data corresponding to the overlapped spatial blocks, merging traces together from all spatial blocks, convolving the merged traces with corresponding source signatures, and re-blending the resulting traces; and generating an image of the subsurface based on the de-blended model m.