The .bmp must be the same name as the CO of your squad. Place it in your AHII/Squads folder & then click Upload Noseart in the O'club in-game, then give Skuzzy a little time to accept it into the game. In the mean time, it will still show up on your planes on your screen because you have the .bmp in your Squads folder (or anyone else who puts it in theirs).
Edit: Fuge beat me by a minute.