PANEL* splash_screen =
{
bmap = splash_jpg;
layer = 2;
flags = TRANSLUCENT | SHOW; //<-- Translucent, else you can't use alpha
}

function pan()
{
wait(-3); // <-- with semikolon
while (pan.alpha > 0)
{
pan.alpha -= 10*time_step;
wait(1);
}
ptr_remove(pan);
}