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While investigating I've been making lots of changes back and forth and that has made this journey rather messy.
I did a lot of playing around and found some issues that I was able to resolve: (buggy kind of issues)
-Although I no longer had a PNG file in my resource folder, it still existed as a .stex in the .import folder and I was still accidently referring to it when loading using the Image.load('resourcename'). That was REALLY throwing me off! Godot really needs to keep obsolete import files cleaned out, although there's probably a reason they are kept around.
-My image was still too dark in my main project despite looking ok in the demo project. I found two .stex files for the same file in the .import folder and couldn't figure out why until I did a search and found a duplicate of the JPG archived in a subfolder I wasn't using. I got rid of the subfolder and suddenly everything looks good! Not sure if there was a problem with having the same file twice in two different places in the RES folder; maybe a user-case the developers didn't think anybody would actually do since you would normally just refer to the same image, not import two copies. User's are really good at doing crazy things the developers assume nobody would attempt because 'that makes no sense!' lol.
Here is what I have found working now:
1) Disable 'sRGB' when importing an image. JPGs work fine also. This is a must. (Detect sRGB may also work, which is the default)
2) Enable HDR in Quality in project.
3) Turn off HDR in the Viewport.
4) This is the import function I use for all of my images: It turned off the convert_to_linear flag.
var diff = SelectBG(variation)
IMG = Image.new()
IMG.load(g.ImageBank[diff]) #"res://0300s/N0315_OfficeShopDoor/BG0315.jpg") #g.ImageBank[diff])
IMG.convert(Image.FORMAT_RGBA8)
TEX = ImageTexture.new()
var flgs = Texture.FLAG_FILTER (do not use flgs += Texture.FLAG_CONVERT_TO_LINEAR)
TEX.create_from_image(IMG,flgs)
g.PB.get_node("BG").texture = TEX
IMG.lock()
4) I added a simple gamma adjustment in the shader. I'm testing some night scenes with dark gradients on the horizon which were hard to get smooth even at the render stage in Blender but even they look good now, no banding at all. I could probably use a more sophisticated color-space adjustment in the shader but it's looking fairly good now.
vec3 tback = texture(pano_tex, UV_Scaled).rgb;
tback = pow(tback, vec3(1.0 / .6));
So for now, it's looking good!