[ART] Item icon not displaying properly while highlighted

[Slanderous]

So I made an icon for an item I have in my custom story, and the when I highlight the item in my inventory it looks like this:

Spoiler below!

As you can see, it has those weird white edges which is strange because the image is transparent and saved in .tga. What's even more strange, is that it's only displayed improperly while highlighted - when the item sits idle without being marked over with the cursor, it works without a flaw, there are no edges around it. I used paint.net for creating this icon.