in the ns.wad there are some textures which aren't working. like alien_alpha1 and alien_alpha2. They have the correct blue, but the blue has the wrong index.
Try it with a texture like {fan or {fanframe from the ns.wad . If you get the blue going away on these textures, you know at least, you got the correct settings

Besides that I suggest you to take a look into the
How-to: Set Up Your Computer For Mapping to see how you can use a better compiler than the one which comes with Hammer