In contrast to traditional predictive coding, Wyner-Ziv video coding enables low-cost encoding architectures, in which the computationally expensive tasks for performing motion estimation are shifted to the decoder-side. In Wyner-Ziv video coding, side-information generation is a key aspect profoundly affecting the compression capacity of the system. This paper presents a novel technique which enables side-information refinement after DC coefficient band decoding in a transform-domain Wyner-Ziv video codec. The proposed side-information refinement approach performs overlapped block motion estimation and compensation, utilizing multi-hypothesis pixel-based prediction. The experimental results show that the presented Wyner-Ziv video codec incorporating the proposed technique yields significant and systematic compression gains of up to 23.22\% with respect to the state-of-the-art DISCOVER codec.