java.awt.image.IndexColorModel incorrectly contrains the transparent pixel value to come from within the colormap range. For example, a valid GIF89a image can have a 128 entry colormap (indices 0 - 127) and specify pixel value 128 as transparent. The setTransparentPixel() method will reject this as it considers that index 128 is outside of the color table. This is understandable, but not correct, as the transparent pixel index has no RGB value associated with it.
Careful reading of the GIF spec confirms that the color table size and the transparent pixel index are not correlated.

The bug provokes an efficiency in the GIF decoder (see comments).

Macromedia Fireworks 1.0 is known to generate GIFs in this way.

(see http://www.htmlbook.com/reference/gif89a.html).