Okay I figured it out. Because I was experimenting with V-Ray it changed all my shaders to have a white diffuse color- changing it to black fixed the issue. Thaank you for all the help. Always funny when its something so simple :)
Switch the 'Alpha Source' of the Bitmap in the Diffuse Channel to 'None (Opaque)'. If you have an Alpha Channel in the Bitmap, the color of the Texture is first blended with the background color of the material before being turned transparent by the opacity map. That results in a halo around the alpha-ed regions in the…