diff --git a/plugins/GSdx/GSRendererDX.cpp b/plugins/GSdx/GSRendererDX.cpp
index 0b0129ebbe..6c75f7e06b 100644
--- a/plugins/GSdx/GSRendererDX.cpp
+++ b/plugins/GSdx/GSRendererDX.cpp
@@ -276,7 +276,7 @@ void GSRendererDX::DrawPrims(GSTexture* rt, GSTexture* ds, GSTextureCache::Sourc
 	if(tex)
 	{
 		const GSLocalMemory::psm_t &psm = GSLocalMemory::m_psm[context->TEX0.PSM];
-		bool bilinear = m_filter == 2 ? m_vt.IsLinear() : m_filter;
+		bool bilinear = m_filter == 2 ? m_vt.IsLinear() : (bool)m_filter;
 
 		ps_sel.wms = context->CLAMP.WMS;
 		ps_sel.wmt = context->CLAMP.WMT;
@@ -285,6 +285,8 @@ void GSRendererDX::DrawPrims(GSTexture* rt, GSTexture* ds, GSTextureCache::Sourc
 			const GSLocalMemory::psm_t &cpsm = GSLocalMemory::m_psm[context->TEX0.CPSM];
 			ps_sel.fmt = cpsm.fmt | 4;
 		}
+		else if (psm.pal > 0)
+			ps_sel.fmt = 0;
 		else
 			ps_sel.fmt = psm.fmt;
 		ps_sel.aem = env.TEXA.AEM;
diff --git a/plugins/GSdx/GSTextureCache.cpp b/plugins/GSdx/GSTextureCache.cpp
index 7a1ae9d91c..06984c49b2 100644
--- a/plugins/GSdx/GSTextureCache.cpp
+++ b/plugins/GSdx/GSTextureCache.cpp
@@ -56,6 +56,7 @@ void GSTextureCache::RemoveAll()
 GSTextureCache::Source* GSTextureCache::LookupSource(const GIFRegTEX0& TEX0, const GIFRegTEXA& TEXA, const GSVector4i& r)
 {
 	const GSLocalMemory::psm_t& psm = GSLocalMemory::m_psm[TEX0.PSM];
+	const GSLocalMemory::psm_t& cpsm = psm.pal > 0 ? GSLocalMemory::m_psm[TEX0.CPSM] : psm;
 	const uint32* clut = m_renderer->m_mem.m_clut;
 
 	Source* src = NULL;
@@ -71,7 +72,7 @@ GSTextureCache::Source* GSTextureCache::LookupSource(const GIFRegTEX0& TEX0, con
 			continue;
 		}
 
-		if((psm.trbpp == 16 || psm.trbpp == 24) && TEX0.TCC && TEXA != s->m_TEXA)
+		if(!m_paltex && TEX0.TCC && cpsm.fmt > 0 && TEXA != s->m_TEXA)
 		{
 			continue;
 		}
@@ -582,6 +583,9 @@ GSTextureCache::Source* GSTextureCache::CreateSource(const GIFRegTEX0& TEX0, con
 
 	bool hack = false;
 
+	if (dst)
+		dst->Update();
+
 	if(m_spritehack && (TEX0.PSM == PSM_PSMT8 || TEX0.PSM == PSM_PSMT8H)) 
 	{
 		src->m_spritehack_t = true;
@@ -600,8 +604,6 @@ GSTextureCache::Source* GSTextureCache::CreateSource(const GIFRegTEX0& TEX0, con
 
 		src->m_target = true;
 
-		dst->Update();
-
 		GSTexture* tmp = NULL;
 
 		if(dst->m_texture->IsMSAA())