Select the layer with the imported .png file in it that is now a symbol. In the effects panel choose Tint and choose a color the same as the background color, whatever it may be.
Done
The edges of the masked area blend pretty nicely. Changing to different colors
is easy. You can just change the background color and change the Tint setting
of the PNG layer to the new background color. You could work with more elaborate
Photoshop masks or using a gaussian or other types of blurs instead of a gradient
fills work as well. You could scroll horizontally or experiment with different
effects in the Flash effects panel.