How does the size of the graphic compare against the margin settings for it in the xml file?
Margins="15,0,15,0"
This, for example, tell MC to use 15 pixel margins on the left and right, and zero pixel margins top and bottom. If the image were only, say, 20 pixels wide, MC would get upset and draw wierd stuff.
If that does not help, could you post the image and the line of xml that draws it. Without those, the suggestion above is the best I can come up with.
-marko.
Edit: One last thought...
You say: "When I change the colour"... If you are replacing any magenta, and magenta happens to specified in the xml as the transparent colour, that might make wierd things happen too, such as previously hidden areas of the graphic becoming visible?