[Big Kahuna]

The reason the bad graphic in the above post now looks good is that I found the answer on the F5hosting forum.

For those others of you who have been waiting days for the detailed answer on how to make the washed out graphics work -- the answe is (drum roll)

The image you are using has more than 256 colours so the method in the hack will never work. The function they should have used to create the initial image is imagecreatetruecolor and not imagecreate, so if you replace the line

$img = imagecreate($width,$height);

with

$img = imagecreatetruecolor($width,$height);

it should work.