.vtf problems

I seem to be having trouble with my texture in gmod. I wrote a small script in garrysmod to render a .vtf silk icon on screen as a sprite.
I took the original .png of the silk icon and converted it into a .vtf using a gimp plugin because .png format was giving me trouble.

Here is my code in the cl_init.lua for a swep I’m coding.

[LUA]function DrawDisplay()

cam.Start3D(EyePos(), EyeAngles())
	render.SetMaterial(Material("icon16/arrow_down"))
	render.DrawSprite(Vector(500, 0, 50), 16, 16, Color(255,255,255,255))
cam.End3D()

end
hook.Add(“PostDrawOpaqueRenderables”, “DrawShit”, DrawDisplay)[/LUA]

Here are some screenshots demonstrating the error I’m talking about:

Here is the original silk icon I was trying to use:

Any tips?

Uh… Maybe try more (MOAR) bigger pic and using PS4 plugin?

It has nice quality when compiling.