Duplicate the Quake palette CLUT with transparency flag set, to use for water surfaces. Doesn't actually work yet but the solution should be something in this direction.

texture.cpp

@@ -48,11 +48,13 @@ static bool generate_clut(const char* paletteFile, tim::PARAM* outTim)
 	fread(palette, sizeof(unsigned char) * 3, PALETTE_SIZE, fp);
 	fclose(fp);
 
-	tim::PIX_RGB5* clut = (tim::PIX_RGB5*)malloc(PALETTE_SIZE * sizeof(tim::PIX_RGB5));
+	tim::PIX_RGB5* clut = (tim::PIX_RGB5*)malloc(PALETTE_SIZE * sizeof(tim::PIX_RGB5) * 2);
 	if (clut == NULL)
 		return false;
 
-	for (int c = 0; c < PALETTE_SIZE; ++c)
+	memset(clut, 0, PALETTE_SIZE * sizeof(tim::PIX_RGB5) * 2);
+
+	for (int c = 0; c < PALETTE_SIZE - 1; ++c)	// Final palette entry is for alpha masking
 	{
 		unsigned char color[3];
 		desaturate(&palette[3 * c], color);
@@ -60,16 +62,23 @@ static bool generate_clut(const char* paletteFile, tim::PARAM* outTim)
 		clut[c].r = color[0] >> 3;
 		clut[c].g = color[1] >> 3;
 		clut[c].b = color[2] >> 3;
-		clut[c].i = (c == 255);	// Final palette entry is for transparencies
+		clut[c].i = 0;
 
 		// Completely black pixels are regarded as transparent by the PS1, so prevent that from happening by making those palette entries *nearly* black
 		if (clut[c].r == 0 && clut[c].g == 0 && clut[c].b == 0)
 			clut[c].r = clut[c].g = clut[c].b = 1;
 	}
 
+	// Create a second palette with the transparency flag set. Used for water surfaces.
+	for (int c = 0; c < PALETTE_SIZE; ++c)
+	{
+		clut[c + PALETTE_SIZE] = clut[c];
+		clut[c + PALETTE_SIZE].i = 1;
+	}
+
 	outTim->clutData = clut;
 	outTim->clutWidth = PALETTE_SIZE;
-	outTim->clutHeight = 1;
+	outTim->clutHeight = 2;
 	return true;
 }