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After applying a transparency percentage to a map service that is cached in PNG32 format, the layer is displayed without transparency. This issue applies to Web applications built with the ArcGIS Server Web ADF for the Microsoft .NET Framework.
Browser limitations prevent the transparency percentage from being applied successfully to PNG32 images.
Consider using the PNG24 or PNG8 format instead, as the transparency percentages work for these formats. If those image formats are not acceptable, change the Map Control's ImageBlendMode property to WebTier.