What would be the effect if converted simply to DXT3?

That would work just fine as long as the dxt3 files have the alpha bit correctly set.

I don't think mixing dxt1 and dxt3 does any harm, because you see it all the time.

So did I and didn't find any dxt3 alpha issues either. There were other issues in this case as I stated in my post.

Thanks, Peter.

My misunderstanding:  I thought dxtfixer would catch those as well.

 

Phil