PNGs not rendering as transparent

[madmac66]

Has anyone ever encountered this weird, unique error I am getting

When I export my program to a SWF all the imported PNGs with alpha transparency (ie; soft edges) render totally wrong - no transparency, very blocky and pixelated. See the attached image for an example;

http://skitch.com/madmac66/w6cx/bitmap-properties

http://img.skitch.com/20080903-eqjrjpncqxdeccsjjaekxt95i6.jpg

Any ideas, this is out of the blue. Has exported fine recently.

cheers
mm66

[madmac66]

I should state that this worked fine in an AS2 file but is now showing this anomaly in an AS3 file