Well you need the tm2 reader for photoshop.
Then you need the 128x256 template. After this open it on photoshop, open also the png. Copy the image and paste it on the template. Edit the sizes as you want. Now create a new alpha channel, after creating select the first. Now on layer select the first and with the mouse on the left of layer 1 type press ctrl + click. Select again the alpha channel. Paint at 50%. After paiting all click on the image with the right button and select 'select inverse' and paint at 100%. After finishing right button and deselect. Now save, select tm2. It will open a menu convert to rgb clut, then at the left botton you have to click twice on a little box (I don't remember what's written). Now click on swizzle image and you have finished