Big flashy effects made in gimp dont usualy stay after the color conversion. Are you trying to do them on a character sprite? Perhaps you should try to make it its own image and see if you can still get the look, that way you can add it in as a helper...
Fade out how? Like gradualy? Yeah thats going to take time, but you can darken the sprites using fighter factory's palete editor, then save the image with each time youve darkend the colors untill you've faded it to black.