Custom materials not working

[Evil Ash]

In the MaterialEditor, change the BLEND method to Alpha.
It defaults to Add.

Unless it is on Alpha, then you may have your alpha channel inverted.

Also ensure no animations have been specified.

This should resolve the ingame issue. I have some custom textures that show fullbright as well in the editor, but everything is peachy in game.

You can also manually open the .mat files of other textures and compare to your generated .mat (open using notepad/wordpad).

Find settings that differ and try copying them from the working material.