i also tried this as a .jpg, .jpeg, .gif, .bmp, AND .dmi!!!!
NOTHING WORKED -- same error everytime, but every other icon using turf and obj worked fine, so i renamed it to pie. Same result.

I restarted BYOND and tried in many different Dream Maker enviroments, same result everytime.

Did BYOND get rid of all picture files in the update or something ??

any1 feel like helpin
Maybe your "title.png" isn't really a .PNG file.
In response to Jon88
yea it was all of those file types
In response to Devin148
Simply renaming the file won't change its type. It may have the extension .png, but that doesn't mean that the image data contained within the file is actually in PNG format.

What program did you use to create it?
The only two (non-DMI) formats supported by BYOND are portable network graphics (PNG) and bitmap (BMP). MS Paint in Windows XP can edit and save as both types (as well as edit and save as a lot more), so if your PNG file isn't working, then it's likely as Crispy or Jon said, "It's not actually a PNG file". Open it in MS Paint and "re-save" it as PNG, and see if you still get this problem.
In response to Crispy
i used Microsoft digital image, which is pretty much a cheap knock-off of photoshop
In response to Devin148
Again, just make sure you save the file as an actual PNG file. The extension doesn't mean it necessarily is; it's just an indication. In MS Paint (hell, probably just about everything), you do it by pressing 'Save As', and in the 'Save as type' box, choose PNG. You better also make sure you have your filename field like this (including quotes): "filename.png". It will save as a PNG regardless, however that will make sure it actually gets the correct extension.