Here's how it looks when it's good. (Yes, that's actually 2 textures. It looks perfect.)

But from the other angle it looks like this:

I'm pretty sure I did everything right for the settings. The vertex color "Col" layer is all white, and the "Alpha" layer is all white except for the bottom, which is painted black to be the transparent part.
I used this tutorial if it matters: http://www.guildofwriters.org/wiki/Decal_Blending