AFAIK the only PNG format that supports the alpha layer is PNG-24; To reduce PNG to another format, you may need to specify a transparent color in CLUT, which will not give you the result you need.
From the list of functions on the PNG website:
- 8- and 16-bit fetch (i.e. 24- and 48-bit) truecolor support
- full alpha transparency in 8- and 16-bit modes, not just transparent transparency like GIF
... which I read to mean that nothing but PNG-24 or PNG-48 supports full alpha transparency.
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