diff --git a/include/common.h b/include/common.h
index 58d6722..af27512 100644
--- a/include/common.h
+++ b/include/common.h
@@ -19,7 +19,7 @@
 #define VERSION_X 1
 #define VERSION_Y 2
 #define VERSION_A 0
-#define VERSION_Z 3
+#define VERSION_Z 4
 // Remember to bump "Z" basically every time you change the engine!
 // Remember to bump the version in Lua too!
 // Remember to document API changes in a new version!
diff --git a/pkg/base/gfx/loading_default-256c.png b/pkg/base/gfx/loading_default-256c.png
new file mode 100644
index 0000000..56918de
Binary files /dev/null and b/pkg/base/gfx/loading_default-256c.png differ
diff --git a/pkg/base/main_client.lua b/pkg/base/main_client.lua
index d68b2d1..f817ea6 100644
--- a/pkg/base/main_client.lua
+++ b/pkg/base/main_client.lua
@@ -135,10 +135,12 @@ end
 dofile("pkg/base/lib_gui.lua")
 
 -- 0.1.2-2 introduces PNG support
-if common.version.num < 4259840+2 then
+-- 0.1.2-4 introduces support for indexed+greyscale images and tRNS-block (magic colour + palette alpha) transparency
+-- there's no reason to make them load the full RGB image when they don't support the indexed one.
+if common.version.num < 4259840+4 then
 	img_loading = img_loading or skin_load("tga", "loading_default-64c.tga", DIR_PKG_GFX)
 else
-	img_loading = img_loading or skin_load("png", "loading_default.png", DIR_PKG_GFX)
+	img_loading = img_loading or skin_load("png", "loading_default-256c.png", DIR_PKG_GFX)
 end
 
 img_map = img_map or common.img_load("*MAPIMG")
diff --git a/pkg/base/version.lua b/pkg/base/version.lua
index a848ef3..a8c9713 100644
--- a/pkg/base/version.lua
+++ b/pkg/base/version.lua
@@ -16,9 +16,9 @@
 ]]
 
 VERSION_ENGINE = {
-	cmp={0,1,2,0,3},
-	num=4259840+3,
-	str="0.1.2-3",
+	cmp={0,1,2,0,4},
+	num=4259840+4,
+	str="0.1.2-4",
 }
 
 -- 0.1: 4194304
@@ -114,7 +114,9 @@ VERSION_BUGS = {
 {intro=nil, fix=4259840, msg="Sound broken wrt stereo (only the last sound played is in stereo; the rest uses the left for both channels)"},
 {renderer="softgm", intro=nil, fix=4259840+1, msg="[OSX][softgm] Colours are incorrect (32-bit endian swap)"},
 {intro=nil, fix=4259840+2, msg="PNG not supported"},
-{intro=4259840+2, fix=nil, msg="Preliminary PNG support - more support to come when we can be bothered (RGB/RGBA only for now)"},
+{intro=4259840+2, fix=nil, msg="Preliminary PNG support - more support to come when we can be bothered"},
+{intro=4259840+2, fix=4259840+4, msg="PNG reader lacks support for greyscale/indexed images"},
+{intro=4259840+2, fix=4259840+4, msg="PNG reader lacks support for tRNS-block transparency"},
 {intro=4259840+3, fix=nil, msg="[OpenGL] option to set render quality"},
 }
 
diff --git a/src/png.c b/src/png.c
index 3dd3a81..a3195bb 100644
--- a/src/png.c
+++ b/src/png.c
@@ -150,9 +150,12 @@ img_t *img_parse_png(int len, const char *data)
 		return NULL;
 	}
 
+	// TODO: implement 1,2,4bpc for modes 0 (greyscale) and 3 (indexed)
+	//if(((ihdr.ctyp != 3 && ihdr.ctyp != 0) || (ihdr.bpc != 1 && ihdr.bpc != 2 && ihdr.bpc != 4)) && ihdr.bpc != 8)
 	if(ihdr.bpc != 8)
 	{
-		fprintf(stderr, "img_parse_png: only 8-bits-per-component images currently supported\n");
+		//fprintf(stderr, "img_parse_png: given bits-per-component not supported (16bpc unsupported at the moment)\n");
+		fprintf(stderr, "img_parse_png: given bits-per-component not supported (only 8bpc supported at the moment)\n");
 		return NULL;
 	}
 
@@ -162,12 +165,6 @@ img_t *img_parse_png(int len, const char *data)
 		return NULL;
 	}
 
-	if(ihdr.ctyp != 2 && ihdr.ctyp != 6)
-	{
-		fprintf(stderr, "img_parse_png: given colour type not supported yet!");
-		return NULL;
-	}
-
 	if(ihdr.cmpr != 0)
 	{
 		fprintf(stderr, "img_parse_png: compression type not supported");
@@ -186,6 +183,11 @@ img_t *img_parse_png(int len, const char *data)
 		return NULL;
 	}
 	
+	uint8_t pal[256*3];
+	uint8_t trns[256];
+	int pal_len = 0;
+	int trns_len = 0;
+
 	char *cbuf = NULL;
 	size_t cbuf_len = 0;
 	for(;;)
@@ -216,6 +218,40 @@ img_t *img_parse_png(int len, const char *data)
 			cbuf_len += clen;
 		} else if(!memcmp("IEND", tag, 4)) {
 			break;
+		} else if(!memcmp("PLTE", tag, 4)) {
+			if(ihdr.ctyp != 3)
+			{
+				// probably best not to spam this stuff.
+				//fprintf(stderr, "img_parse_png: PLTE tag for non-indexed image ignored\n");
+			} else if((clen % 3) != 0 || clen > (3<<ihdr.bpc) || clen > 256*3) {
+				fprintf(stderr, "img_parse_png: invalid PLTE length\n");
+				if(cbuf != NULL)
+					free(cbuf);
+				return NULL;
+			} else {
+				pal_len = clen / 3;
+				memcpy(pal, data+8, clen);
+			}
+		} else if(!memcmp("tRNS", tag, 4)) {
+			// we might as well be better than Internet Explorer
+			int explen = -1;
+			if(ihdr.ctyp == 0)
+				explen = 2;
+			else if(ihdr.ctyp == 2)
+				explen = 6;
+			else if(ihdr.ctyp == 3)
+				explen = pal_len;
+
+			if(explen == -1)
+			{
+				fprintf(stderr, "img_parse_png: warning: tRNS not expected for this image type!\n");
+			} else if((ihdr.ctyp == 3 ? clen > explen : explen != clen)) {
+				fprintf(stderr, "img_parse_png: warning: tRNS chunk length incorrect; ignored\n");
+			} else {
+				memset(trns+clen, 0xFF, 256-clen);
+				memcpy(trns, data+8, clen);
+				trns_len = clen;
+			}
 		} else if(!(tag[0]&0x20)) {
 			fprintf(stderr, "img_parse_png: unexpected compulsory tag %c%c%c%c\n"
 				, tag[0], tag[1], tag[2], tag[3]);
@@ -384,6 +420,21 @@ img_t *img_parse_png(int len, const char *data)
 
 		switch(ihdr.ctyp)
 		{
+			case 0:
+				// Greyscale
+				for(x = 0; x < iwidth; x++)
+				{
+					dst[0] = src[0];
+					dst[1] = src[0];
+					dst[2] = src[0];
+					dst[3] = (trns_len == 0
+						|| trns[0] != src[0]
+							? 0xFF : 0x00);
+					src += 1;
+					dst += 4;
+				}
+				break;
+
 			case 2:
 				// RGB
 				for(x = 0; x < iwidth; x++)
@@ -391,11 +442,42 @@ img_t *img_parse_png(int len, const char *data)
 					dst[0] = src[2];
 					dst[1] = src[1];
 					dst[2] = src[0];
-					dst[3] = 0xFF; // TODO: tRNS block
+					dst[3] = (trns_len == 0
+						|| trns[0] != src[0]
+						|| trns[2] != src[1]
+						|| trns[4] != src[2]
+							? 0xFF : 0x00);
 					src += 3;
 					dst += 4;
 				}
 				break;
+
+			case 3:
+				// Indexed colour
+				for(x = 0; x < iwidth; x++)
+				{
+					dst[0] = pal[src[0]*3+2];
+					dst[1] = pal[src[0]*3+1];
+					dst[2] = pal[src[0]*3+0];
+					dst[3] = (trns_len == 0 ? 0xFF : trns[src[0]]);
+					src += 1;
+					dst += 4;
+				}
+				break;
+
+			case 4:
+				// Greyscale + Alpha
+				for(x = 0; x < iwidth; x++)
+				{
+					dst[0] = src[0];
+					dst[1] = src[0];
+					dst[2] = src[0];
+					dst[3] = src[1];
+					src += 2;
+					dst += 4;
+				}
+				break;
+
 			case 6:
 				// RGBA
 				for(x = 0; x < iwidth; x++)
diff --git a/zipdist.sh b/zipdist.sh
index 28fb819..799e7a8 100755
--- a/zipdist.sh
+++ b/zipdist.sh
@@ -1,6 +1,6 @@
 #!/bin/sh
 
-export ZIPNAME=nubdist/iceball-indev-0.1.1-9.zip
+export ZIPNAME=nubdist/iceball-indev-0.1.2-4.zip
 
 zip -r $ZIPNAME *.dll *.exe *.txt opencmd.bat docs/ \
 	dlcache/info.txt clsave/info.txt \