Hiya Joe,
I do have DXTbmp, and tried your suggestion. Indeed, it fixed the corruption, so no crashing (yay!). However, a new problem has emerged, and I suspect it has to do with the alpha channel. The airplane in question is now extremely shiny...would I use the same program to alter the alpha? Or would "include mipmaps" when saving help? Thanks again for your help!
*edit: I played around with it some more, and by saving the file as DXT3, I was able to avoid computer crashing as well as the 'mirror effect' (which I was think was limited to the 888-8 texture). Thanks again guys!
George