Ok, there's a bug in .POLS and DDS DXT1 with:
NO_ALPHA vs ALPHA
No_ALPHA removes the 'washed out' alpha channel correctly
With an Alpha channel enabled, even though I never use it (1 Bit alpha i.e. on/off to crop imagery - i.e. never triggered in the opaque areas), it still 'washes out' the entire DDS; and i have screenshots to prove it =)
- CK.