I'm editing the dirt of the level. I think its called "Blood Ground." I go to import the image and heres what happens. The only file setting that works is DXT3. That gets the picture in fine, except for one thing. The parts where the grass should show through are white. I think I'm doing something wronge here as far as saving the transparent part of the image.
Here are some pics...
Before I save it...

what im saving with...

After I save it... (I re-open the image)

In the game...

How do I make it so that when I save the image, the transparent part of the image isn't turned white? What im trying to do is save alpha channel, but when I try I hit another problem... Go figure...
Here are the two errors I get when i try and save the image. (a .dds DXT3) These both happen as I save.

How would I save the alpha channel? If I cant save an alpha channel, how would I make the transparent areas of the map so the grass will show through?
Thanks