16 bit gray fading not working

Hello everyone.... I am having a problem with gray fading. The image shows up correctly with 32 bit color depth, but with 16 bit, the fading screws up... Please see the attachments for more details. I have used Photoshop to create this picture and all I have done is created a gradient.... The image is originally a 1 pixel .gif being repeated-y in the background..but I doubt that's got anything to do with it. I have tried several output settings in Photoshop - such as 8bits/channel .. 16bits/channel - to get it to show correctly but nothing seemed to work!

Can someone explain what is causing this and perhaps provide a solution? Thanks much in advance!