I was working with the file as a jpg rather than a gif.
Try creating a new project and just copy/paste the image into that new project (hint: when you create a new project and you have an image on your clipboard, it automatically suggests that the new project be the size of your clipboard image =
very helpful). The reason I suggest you use a new project and then put the image into that instead of directly editing the image (jpeg or gif) is because project files support everything, all colors, full/partial transparencies, the whole bit. Jpegs don't support transparencies (as you have found out) and Gifs don't support more than 256 colors or partial transparencies. Using the project file gives you freedom to create an image exactly like you want it, perfect in every aspect, then you can export that and convert it to a gif or jpeg or tiff or png or whatever.
Just a little advice ^_^