I am sending base64 encoded image from client side using javascript (I am creating Screenshot uploader applet for asp.net application using http://supa.sourceforge.net/) and
I needed to do something similar, but wanted to work directly with the InputStream, so used this to do the decoding:
// using System.Security.Cryptography
var stream = new CryptoStream(Request.InputStream, new FromBase64Transform(), CryptoStreamMode.Read);
var img = Image.FromStream(stream);