Ok first of all I wanna thank you guys for all the help, I think this is a real problem that needed some answers.
I figured it out kinda. Instead of doing all that stuff again to try and figure out well whatever was going wrong I just used a crappy Adobe PS elements editor. I edited the pic, saved them as a ping then imported them into my game and they looked great with no issues at all!
It took maybe 5 min to notice this worked, so if anyone else is having this problem this would be a much faster simple fix to it. lol I really dont know what to say now, but i am happy to be able to work on my 2003 game now so thanks guys.