Sorry to double post, but I've just discovered something.
As you can see from my post above I've being having problems trying to convert to dds without incurring compression losses.
I tried all the compression options for DXT3 which was the dds format that everyone has listed as that required to import into SH5.
I tried all the other applications to see if the results would be better than photoshops, but they all had similar to worse results.
As I'm trying to create a High Resolution UI Mod the losses above were just not acceptable for the scale they were to be displayed at.
Not happy with the results, I started to mess with the .dds export setting in the DDS Photoshop Plugin - trying every export type and compression settings besides DXT3 and DXT5.
Importing each file type into the SH5 Editor.
I was very surprised to find this one actually worked and displayed perfectly in the Editor. (Alpha channels display perfectly as well)
Results are a 1:1 copy of the original PSD file, although file sizes for the dds file are just to big. The Following example has a file size of 4MB.
But the editor displays it with no problem.
dds export used was 32.32.32.32f ABGR 128 bpp / Floating Point.
