Canopy shadowing mediated by topography is an important source of radiometric distortion on remote sensing images of rugged terrain. Topographic correction based on the sun–canopy–sensor (SCS) model significantly improved over those based on the sun–terrain–sensor (STS) model for surfaces with high forest canopy cover, because the SCS model considers and preserves the geotropic nature of trees. The SCS model accounts for sub-pixel canopy shadowing effects and normalizes the sunlit canopy area within a pixel. However, it does not account for mutual shadowing between neighboring pixels. Pixel-to-pixel shadowing is especially apparent for fine resolution satellite images in which individual tree crowns are resolved. This paper proposes a new topographic correction model: the sun–crown–sensor (SCnS) model based on high-resolution satellite imagery (IKONOS) and high-precision LiDAR digital elevation model. An improvement on the C-correction logic with a radiance partitioning method to address the effects of diffuse irradiance is also introduced (SCnS + C). In addition, we incorporate a weighting variable, based on pixel shadow fraction, on the direct and diffuse radiance portions to enhance the retrieval of at-sensor radiance and reflectance of highly shadowed tree pixels and form another variety of SCnS model (SCnS + W). Model evaluation with IKONOS test data showed that the new SCnS model outperformed the STS and SCS models in quantifying the correlation between terrain-regulated illumination factor and at-sensor radiance. Our adapted C-correction logic based on the sun–crown–sensor geometry and radiance partitioning better represented the general additive effects of diffuse radiation than C parameters derived from the STS or SCS models. The weighting factor Wt also significantly enhanced correction results by reducing within-class standard deviation and balancing the mean pixel radiance between sunlit and shaded slopes. We analyzed these improvements with model comparison on the red and near infrared bands. The advantages of SCnS + C and SCnS + W on both bands are expected to facilitate forest classification and change detection applications.