I've been bashing my head against this all day, possibly because I'm missing something obvious!
Because the Shadow Lights don't have any fall-off over distance I'm trying to set a few of them up on separate layers, using a white-to-transparent gradient with "Source In" set on the shadow light entity to control the area they show up in. This works pretty great, but I haven't found a way to stop the 'masking' sprite from showing up, and obviously it doesn't look so good having white blobs everywhere!
Is there a way to hide the 'mask' sprite while still having it's Source In blending affect the Shadow Light below it? Am I going about this the right way?