OK, first issue, distorted colors, this is caused by the screen image and progress bar not have the same color palette.
Second issue, errors that will cause skin not to show in list in bootskin;
Screen image wrong size, must be 640x480.
Color depth for screen image wrong, must be 16 color 4 bit.
Info for image in .ini not the same as image name.
Easiest way to ensure progress bar has same palette as screen image.
Decrease image to 16 color using IrfanView, save. Open image in MS Paint, draw 22x9 progress bar image on screen image picking colors from image. When you have it the way you want rectangle select the 22x9, from menu bar Edit, Copy to, copy to folder where screen image is. Close MS paint, do not save changes, do not want prog bar on it. Then put your .ini together.
Hope this helps.