Working with .PNGs

In Flash 8, you were able to work with .png files as the main source for graphics. I’ve even seen it stated that it was the preferred format for files imported into flash. But in CS3 when I adjust the alpha of a png, it loses all of its previous transparency info.

For example make take an image in photo shop, gradient erase part of it and import it into flash as a png. Then with action script set the alpha of the graphic to 100. Instantly the background transparent turns black. I’ve attached a sample image.

Any idea how to fix that?