The code to create a transparent PNG turned out to be a litle complicated:

<?php
// create a true colour, transparent image
// turn blending OFF and draw a background rectangle in our transparent colour
$image=imagecreatetruecolor($iwidth,$iheight);
imagealphablending($image,false);
$col=imagecolorallocatealpha($image,255,255,255,127);
imagefilledrectangle($image,0,0,$iwidth,$iheight,$col);
imagealphablending($image,true);
// ^^ Alpha blanding is back on.

// insert image manipulation stuff in here

// output the results...
header("Content-Type: image/png;");
imagealphablending($image,false);
imagesavealpha($image,true);
imagepng($image);
?>

Important Note: If you output the image direct into the document stream as this example does, the PNG fix that uses bahaviours won’t work as it’s not a true PNG. For that, you’ll have to drop the header and give imagepng() a filename and show that file. Seems to work fine in other browsers, however.