How to clear graphics on a transparent control in windows forms
Okay, I found the solution here: https://web.archive.org/web/20141227200000/http://bobpowell.net/transcontrols.aspx
The Parent controls actually must be invalidated in order to retain the transparent background.
You may have to override OnPaintBackground that this article presents: http://saftsack.fs.uni-bayreuth.de/~dun3/archives/creating-a-transparent-panel-in-net/108.html
You may also need to Invalidate the control when it needs to be cleared to force OnPaintBackground to be called.