After some time investigating live screen capture with acceptable performance, here is an application that does that and produces Spout output. The project is open source on GitHub and you can download a release from there.
It uses the “Desktop Duplication” method for Windows 8 and 10. The method duplicates the visible desktop and so any applications to be captured have to be entirely visible and not obscured by other windows.
A sender “SpoutDesktop” provides the entire desktop to all receivers. A second sender “SpoutWindow” gives the portion of the desktop beneath the application window. The SpoutCapture window is transparent to allow this.
A particular application window can be captured by positioning and resizing SpoutCapture over it. If all you require is the desktop, minimise the SpoutCapture window.
Ideally we would capture the “back buffer” so that application windows could be obscured by other windows, but older CPU methods are too slow and only really useful for screen snapshots. Other methods using “hooking” are difficult to create.
So here is something to try and I would be pleased to hear any feedback.