Raghunathan:
I would simply use a 16-bit serial D/A. Here is the data link for one from Analog Devices. The AD5541/42 should be just what you need. The output of this part is unbuffered and limited to driving a load of 60K ohms.

I have looked at the dual 8-bit concept on various occasions in the past and always came away with the fact that it is very difficult to get the two output gains to track at 1X and 256X in order to get it to work accurately.

Michael Karas