PNG support is broken in XWE Beta, as they do work in XWE1.16(Not the Beta), but 1.16 doesn't support lowercase lumps. When I first started working on my Blaze WAD, I saved my work as PNG, added the sprites into the WAD with 1.16, and then used the Beta to make the last lumps lowercase...but renaming lumps with every minor edit gets tiring after a while, :P so I started saving my work in BMP from then on and just used XWE Beta.