Thanks for reporting the problem. I don't think that a 3D engine renders textures any differently when their file names ended with .PNG.

Thus, your problem is not the .PNG format, but that the image itself is wrong. The most frequent mistake is accidentally using a 32 bit image with alpha channel. That's why the manual says to use TGA, PCX, BMP, and DDS. Just because the least mistakes can be made with them.