TOOGAM, Tech's BLP to TGA and TGA to BLP converters don't work that well for two reasons;
1) When the BLP is converted to TGA, the Alpha Channel is dropped out. Saving a TGA from MyWarcraftStudio, by comparison, retains the Alpha Channel
2) When the TGA is converted to BLP, the result is a 'lossy' BLP, usually halving the size of the original BLP. Often, I get a missing graphic.
Any other suggestions on tools that do the conversion without these problems?
By the way, I noted your issues with editing the actual Alpha Channels that are native to the actual BLPs, and these can be edited in the 'Channels' tab of Photoshop, if you are able to get your hands on Photoshop. Perhaps something like this exists in Paintshop Pro, but I'm not sure, as I don't use that program.