My custom texture is discolored

[Kid_Krusher13]

So here's the thing, I'm trying to use this image as a robot skin by putting it as a texture fill



but it ends up Black and White and completely messed up(in game photo below)



I'm planning on releasing a texture pack based on all the Camos in Call of Duty Black Ops 2 for the fans of the series.But this issue is setting this goal back.Please help.

[Badnik96]

Is it 128 x 128 (or a multiple of it) and a BMP file?