I played around a bit with image with 16 bit images and various colormaps and couldn't get it to work (to display the complete range properly). The only way I could do it was to convert it to an 8 bit image.
% Create sample 16 bit image.
rows = 600;
columns = 800;
ramp = linspace(1, 5000, columns);
grayImage = uint16(repmat(ramp, [rows, 1]));
% imshow(grayImage, []); % This works.
% image(grayImage); % This doesn't seem to work no matter what colormap I used.
% Convert to normalized uint8 image.
g=uint8(255*mat2gray(grayImage));
image(g); % Now it works.
% Apply gray scale color map.
colormap(gray(256));
colorbar;
