If you have the GIMP (Yes, that free software that runs on Linux and all, and even does pressure-sensitive tablets, etc.), you can actually set up a selection using the Quickmask (when you press the red-bordered button in the bottom left of the window you are editing the quickmask), and paste your grayscale image into it. This will give you a 'feathered' selection where the darker bits are less selected and the lighter bit more, ie. White is selected through to Black is not. If you then exit from quickmask mode (Use the same button), and apply a Gaussian blur with the Maximum blur you want you'll get more or less the effect you're looking for. You'll have to tweak the intensity curves of your greyscale map in order to get the exact desired effect.
This is an effect that I have used several times (Mostly when rendering made-up starfields), and isn't limited to blurring or static blurring (Go ahead and try it with motion blur - that's fun). I don't know if you can do this using Photoshop, but there's probably an equivalent.
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