I'm trying to create transparent areas but the shadow in the fold of the fabric continues to show up. I've played with all the dials and light settings and it's still there.

Any ideas?

Are you sure it's not some polygons that didn't get grouped right? Do you have Highlight set to black on that material?

Well, here's the trans for that section. It's a daz clothing item and I needed a higher res UV map so I exported the obj and used UV Mapper. The top part works perfectly. I have the highlight set to black and I've played around with the ambient and reflective. I also have this problem using the UV template that came with it.

I'm just at a loss.

Hmm.. well, just to be sure of what you're seeing, try disabling shadows on all the lights (and/or disable 'Casts Shadows' on the object itself, using the properties window).

...if it still shows up, then it's not a shadow.

I don't know if this is the same thing, but I've had something similar happen on a few occasions with the clothing object's on Vicki and Mike. I tried deleting and reinstalling the clothing and that didn't work so I deleted the Vicki or Mike character and reinstalled them and that seemed to fix the problem.

I'll try disabling shadows, hadn't thought of that. :)

I don't know if re-installing will help but I could try that. I don't have vicki in there so it couldn't be that.
Maybe I'll email the creator and see if she has an idea.
Thanks for the suggestions. :)