Heightmaps not importing properly

I'm having several issues trying to get heightmaps into unity. I'll preface this with the fact that I'm making my own heightmaps procedurally in java and saving them out as .png files. It is also important to note that I cannot afford unity pro or photoshop. If you're able to help with any of my below problems, or have a better method I don't know about, that would be excellent.

Things I've tried:

1. I made a script to modify a given terrain's heights by a given png file, but it gave me errors about not having read permissions. I can't seem to find the box to set my png to readable, so I'm assuming it is in unity pro.

2. Attempted bringing it into 3ds max, exporting the displaced plane, and using Object2Terrain. Unless I make the model tiny (think 129x129) it always imports into unity as "meshpart_0x". This seems to make that script unusable.

3. Tried opening the png in L3DT and exporting it as a raw. This -kinda- worked... The details would get into unity, but they would be wrong. The images show the difference: In max it properly smooths the "oceans" and keeps my landmasses spiky. In Unity everything just becomes equally spiky, scaling the height up or down doesn't get it to the same degree of spiky vs. smooth that I need.