I would just do this to keep it short. I guess speed doesn't matter much since it's only 32 colors. Are you making an image converter or is it for a demo?
Code:
move.b (a0)+, d0
lsl.w #4, d0
move.b (a0)+, d0
lsl.w #4, d0
move.b (a0)+, d0
lsr.w #4, d0