The other option you may try to get the blur is one I have not really used much myself, but you should be able to select the grass areas (probably easiest by using the select by colour function). Then you can blur along the selected path which should give you your transition.
If you look at RobA's guide he does something very similar with erase to provide worn edges on his title background (its in the last part of the guide). That probably explains the general approach better than I could.
as for the bridges, the easiest approach may be searching the dunjinni forums and dropping in an image.
ill try those later