devkitPro

It looks like it might be because something is loaded in memory overlapping part of the image, not a problem with image conversion.. I think the corruption is the actual map data showing up as graphics. Try changing BG_MAP_BASE and SCREEN_BASE_BLOCK to a different value, and see if the corrupt area ...

Mmm.. honestly I may say that I doubt it.. I mean, I find it hard to believe that for every dialogue every game just manually colors different pixel depending on the dialogue itself... it sounds too much a bother... I dunno how any commercial games do it, but doing it this way is simpler than it so...