How about this:
- Generate a working mosaic with StarAlignment following the sequence that minimizes cumulative errors. For example, to generate a mosaic with 9 panels, make 3 submosaics, one for each row of three images, and then the whole working mosaic taking the central row as reference. Or do it by columns, if more appropriate.
- Now generate your final mosaic using the working mosaic from the previous step as reference. In this way you'll only interpolate each image once. If your mosaic is very large (> 12 frames), perhaps you'll have to help SA defining previews roughly covering the overlapped area for each frame, although the automatic intersection computation routine works nicely in most cases. If you want to use GradientMergeMosaic you'll have to generate separate aligned mosaic frames.
We have used this technique to build very large mosaics with excellent results.