Well, I'm not very sure about the paint program you used since I've only used GIMP to make maps, and I've just followed the video I linked to a T, And it works perfectly. I've also never had to turn off an 'Alpha channel." Or at least it's not in the steps to making a height map on GIMP. So I'm not to sure about that either.
Maybe it's a computer issue possibly? What type of computer do you have? Laptop? Gaming PC/Laptop?
If the computer isn't the issue maybe just remake it over in gimp and follow that video I gave you?