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We propose a novel solution to the problem of robust, low-latency video transmission over lossy channels. Predictive video codecs, such as MPEG and H.26x, are very susceptible to prediction mismatch between encoder and decoder or ldquodriftrdquo when there are packet losses. These mismatches lead to a significant degradation in the decoded quality. To address this problem, we propose an auxiliary codec system that sends additional information alongside an MPEG or H.26x compressed video stream to correct for errors in decoded frames and mitigate drift. The proposed system is based on the principles of distributed source coding and uses the (possibly erroneous) MPEG/H.26x decoder reconstruction as side information at the auxiliary decoder. The distributed source coding framework depends upon knowing the statistical dependency (or correlation) between the source and the side information. We propose a recursive algorithm to analytically track the correlation between the original source frame and the erroneous MPEG/H.26x decoded frame. Finally, we propose a rate-distortion optimization scheme to allocate the rate used by the auxiliary encoder among the encoding blocks within a video frame. We implement the proposed system and present extensive simulation results that demonstrate significant gains in performance both visually and objectively (on the order of 2 dB in PSNR over forward error correction based solutions and 1.5 dB in PSNR over intrarefresh based solutions for typical scenarios) under tight latency constraints.