Sorry for the late reply. I missed your reply somehow. Just received the warning from SwitchCTRL. I believe SwitchCTRL answer is what you were asking about.
Let me know if you still need help
Thanks for the response, switchCTRL and almostApixel! :)
I took a look at that sprite with the curved edge. Since these tiles are 16 x 16, the curved edge tile includes additional detail that doesn't mesh well with the water:
Here's a picture to show you what I mean:
Are you guys slicing the sprites with something different than 16 x 16?
Thank you!