That looks cool. Would you like to share your experiences with texture editing?
Whenever I alter the .dds files of skins and textures with Photoshop (I also use the dds-plugin) the texture turns into some default grey ingame. I suspect that I don't save my changes in a correct manner. Editing .dds files like minimaps and map thumbnails has never been a problem though.
I suspect that the problem is that the game uses different compressions algorithms (namely, DXT1/5 for icons, minimaps etc. and DXT3 for skins). What you need to do is just set correct options in export dialog: DXT3 compression and tick "Generate mipmaps", though I don't know if it's different in Photoshop, as my experience applies only to GIMP, but judging from this tutorial it should be the same.