Alpha blending on a transparent window.

[Shatronics]

Hi,
I'm having trouble with my window. I've made a transparent window using the WS_EX_LAYERED.
I draw a PNG picture with transparency using GDI+. But I need it to blend with the surroundings and not the color key for the window transparency itself.
Attached is a picture showing my problem.

http://img811.imageshack.us/img811/7495/testoi.png

Regards,

Simon H.A.