Motion - Importing .PSD file with grayscale causing issue

I need to import a layered .psd from cs1. There are no effects on it, masks or anything. If I import the file merged everything looks fine but if I import them seperately then the part of the layers that has transparency turns out all funky/blocky/blotchy if that makes since. For instance if I import a layer with just a basketball in the center of the layer and transparency all around it... the basket ball looks great but the rest is all messed up. Its an 8 bit grayscale file that is under 1mb if that matters...
Thanks!
Message was edited by: John-S

It's the grayscale that's the issue. Change it to RGB in Photoshop and all should be good in Motion. Can't use grayscale or CMYK in Motion.

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