PSD support is being added into Wall Worm. There is a potential problem, however. VTEX (the program that compiles your bitmaps into Source VTF textures) can crash if the PSD passed into it doesn't match certain aspects of what it expects.

During testing, I've found that PSD files I created inside 3ds Max with the Viewport Canvas tool will crash VTEX.

My solution has been to open the file in Photoshop and resave it.