So I hacked together a possible solution. In /<catalog>/includes/modules/kiss_image_thumbnailer/classes/Image.php I added one line:
case self::IMAGETYPE_PNG :
$quality = is_null ( $quality ) ? 0 : $quality;
$quality = ($quality > 9) ? $quality=floor($quality / 10) : $quality;
$filters = is_null ( $filters ) ? null : $filters;
return imagepng ( $this->_image, $save_in, $quality, $filters );
break;
The text below in bold and red was injected at line 145.
$quality = ($quality > 9) ? $quality=floor($quality / 10) : $quality;
In a very simple test it seems to be working. But you will have to first delete any previously created png images from /<catalog>/includes/modules/kiss_image_thumbnailer/thumbs.
Thanks,
Jason