The problem is that opening the file directly in Photoshop causes all the transparency goes black (see example screenshots in post #5 above). I can get around this by opening in Preview (on a mac), then saving as a tiff file and opening that in Photoshop. All the answers to searches I did showed that this is inevitable.
But I have to either save as 24 bit png (not totally compatible with all browsers) or as 8 bit with a selected matte colour (not compatible with different background colours)
I fixed the problem by using Fireworks which can open, edit and save 8bit transparent png files (there is a 30 day free trial)