assuming your blue background is 0,255,255, it looks like your color value in your draw() call is wrong.

try this:

 
 
 
 

// load sprite. as load texture, but no mipmaps, no filtering, keycolor = black. recommend bitmaps be square and power of 2 in size.
void Zloadsprite(char *s)
{
HRESULT h;
char s2[100];
if (numtextures >= Zmaxtextures)
{
Zmsg2("Texture database full!");
exit(1);
}
h=D3DXCreateTextureFromFileExA(Zd3d_device_ptr,s,D3DX_DEFAULT,D3DX_DEFAULT,1,0,D3DFMT_A8R8G8B8,mempool,D3DX_FILTER_NONE,D3DX_FILTER_NONE,0XFF000000,NULL,NULL,&(Ztex[numtextures].tex));
if (h != D3D_OK) { strcpy_s(s2,100,"Error loading "); strcat_s(s2,100,s); Zmsg2(s2); exit(1); }
strcpy_s(Ztex[numtextures].name,s);
numtextures++;
}
 

 
 
 
 
 
// draw a sprite. x,y are screen coords of the UL corner.
void Zdrawsprite(int texID,int x,int y,float sx,float sy)
{
D3DXVECTOR3 position;
D3DXMATRIX m;
D3DXMatrixScaling(&m,sx,sy,1.0f);
Zsprite->SetTransform(&m);
position.x=(float)x/sx;
position.y=(float)y/sy;
position.z=0;
Zsprite->Draw(Ztex[texID].tex,NULL,NULL,&position,0xFFFFFFFF);
}
 
 
 
 
 
 

in your draw call, i think the color should be 0xFFFFFFFF to simply pass through what's been loaded.

when directx loads a sprite with color key, i believe it uses the color key to create the alpha channel for you. so your sprite is ready to draw, with no further "modulation" necessary.