see pic1, which is a tga icon I have converted from blp format using War3 Image Extractor, and then opened in Ulead PhotoImpact.
The icon has a border / dashed lines around it, as I have pointed to in the pic. That is the alpha channel / selection area. You should be seeing this if you have converted a properly made blp icon into tga, because blp icons need alpha channels to work.
In PhotoImpact, to get rid of it, right click on the icon, and select "Merge All" in the menu that appears. Now just make sure your icon is saved in tga format and you are done.
pic2 shows the correct size of the icon after the alpha channel is removed.
edit: pic3 shows the size of a tga icon which has an alpha channel (the incorrect size of course)