This happened to me also. Update your graphics card driver and make sure you're using UDK Beta 2
Thanks for the response.
My graphics card is upto date with the newest driver and I'm running beta 2 aswell.
Ive imported many other models and textures and they all work perfectly fine, I even have another 3 models (each with 3 textures, normal, spec, diffuse) and those all work 100% perfectly.
Its just this one texture, if i replace this with a different one then it works perfectly fine again...really odd.
Restarted, reinstalled the NVIDIA driver, same problem still.
All my other models are fine, ive been importing and reimporting textures for them all day and none of those have any problems at all.
Its just that ONE TGA file, but even when i save it under a different file name, or even a different format, it makse no difference
Look at the Alpha layer and the R , G and B layers in Photoshop , it must come from here if there isn't any problem with others textures