Currently available tomographic image reconstruction schemes for optical tomography (OT) are mostly based on the limiting assumptions of small perturbations and a priori knowledge of the optical properties of a reference medium. Furthermore, these algorithms usually require the inversion of large, full, ill-conditioned Jacobian matrixes. In this work a gradient-based iterative image reconstruction (GIIR) method is presented that promises to overcome current limitations. The code consists of three major parts: 1) A finite-difference, time-resolved, diffusion forward model is used to predict detector readings based on the spatial distribution of optical properties; 2) An objective function that describes the difference between predicted and measured data; 3) An updating method that uses the gradient of the objective function in a line minimization scheme to provide subsequent guesses of the spatial distribution of the optical properties for the forward model. The reconstruction of these properties is completed, once a minimum of this objective function is found. After a presentation of the mathematical background, two- and three-dimensional reconstruction of simple heterogeneous media as well as the clinically relevant example of ventricular bleeding in the brain are discussed. Numerical studies suggest that intraventricular hemorrhages can be detected using the GIIR technique, even in the presence of a heterogeneous background.