Having trouble with creating a boot skin

I edited an image in ms paint and made it 640x480 and the colours 16 bit. Everything looks great when I preview it from Bootskin but when I restart it and it shows up its distorted and is sorta dark blue and black. Can someone help me figure this out?

 

 

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I had a similar problem.  It turned out, my color palettes from my progress bar, didn't quite match my background image.  And that made it get all distorted.  Once I fixed that, the colors were fixed.