"Open the FSX texture in DXTBmp and flip the image and Alpha... not mirror"
I don't see anyone "doing anything wrong," it's in the details:
"FSX default textures" are in .dds_dxt5 format and according to Martin Wright are treated the same as before.
When using Extended BMP formats (DXT3), the images have to be flipped -- as so eloquently pointed out in this thread and by Martin Wright at his forum.
What we are doing differently is: Discussing two different file formats which both will work as FSX repaints: The FSX .dds textures (which shipped with FSX) and Extended BMP files which also will work in FSX (flipped and with mipmaps applied).
That's my story and sticking to it :o
I've only repainted one FSX plane successfully so have not yet reached 'Expert FSX Repainter' status . . .