Weird 0_0 when I was changing terrain for example dirt it came up fine. Try this
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make sure you converted the dds file back to iwi properly
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try it with a dirt,sand... texture and see if it works
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Im not that much of a pro at photoshop but also try this unselect any alpha channels if the texture has it if it still doesnt work put alpha back on.
also if it doesnt save it as (not sure bout this havent used photoshop in a while =_=) dx5 no alpha or something like that if it does have alpha save it as dx5 interpolated alpha.
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hope I helped =)