Everytime a PNG file is overlapping a object it is turned into a JPG and the transparency is lost. Even happens when only the transparent areas overlap.

Could the JPG be made with the transparency in place while being made.

I can get my results if I use HTML object with a PNG.

The attached files shows what happens when overlap occurs.

The pictured PNG files are the VSD files.
The others are PNG files made using HTML Tool to help illustrate desired result.

Edit.jpg is the Editor Screen.
Results.jpg is the Output Screen.

Unfortunately that is one of the limitations in the way VSD can handle PNG's at this time. However we are working on upgrading our image library inside of VSD right now and we hope by mid-June we will have a new release which will correct this issue.