Transparent code I use:
Head/face code only!material preset_1_headMatL
{
technique
{
pass
{
alpha_rejection greater_equal 128
texture_unit
{
texture preset_1head.png
}
}
}
}
material preset_1_headMatR
{
technique
{
pass
{
alpha_rejection greater_equal 128
texture_unit
{
texture preset_1head.png
}
}
}
}
Just replace the head material code you have now with this one above.
Make sure the files are png [also save the ears or parts you want transparent for last] and then merge all the layers so they are one whole layer and erase the parts you want transparent.
It will save you A LOT of time and misery.

- Or -
you can even check out these helpful thread
here, and
here! There are plenty of others but these are the other threads I found most helpful if my little super quick tutorial didn't do it for you.

Hope it helps!
EDIT:
As the person said below, yes. Alpha Channel is the key too! [thanks for the reminder!]
The way to get it to Alpha Channel [After merging it all into one whole layer]
Right click on the layer
Fifth option from the bottom up "Add Alpha Channel".
Click that and there you go. You're good to go and erase your little heart out!