Some random thoughts off the top of my head :
1.)
If the game can't find a graphic file, it always displays as a green square on my computer, so double, triple, and quadruple check that you have specified the correct file path and file name.
If the path and name are correct, perhaps the game can't load the graphic ?
I'm not sure if tga files need to be formatted a specific way to be compatible - I always used to convert my tga to blp files, and the blp converter always insisted that the tga file be square shaped with sides that were either 8, 16, 32, 64, 128, 256, etc. pixels per side.
It also insisted that the tga had not been saved with any kind of compression algorithm.
You could look around for the little utilities BLP2TGA and TGA2BLP and convert to blp format and see if it loads...?
2.)
You could double check the texture is in fact a white square - in some graphics pacakges transparant layers can be represented by a uniform white / black colouring; i.e. you can be fooled in to thinking that a "blank" graphic (i.e. one that is completely transparant) is in fact a solid colour.
3.)
You could try passing the Fourth Alpha setting parameter to the :SetVertexColor function.
Is it (r, g, b, @)
or (@, r, g, b)?
Check
www.wowwiki.com for the function name.