IMGZ is a format specific to ZDoom which allows to describe alpha channels without actual color information. It is used to describe the majority of the stock crosshairs.
An IMGZ file starts with a 24-byte header. The first four bytes correspond to the characters "IMGZ", this is followed by four two-byte, little-endian values for the width, height, left offset and top offset respectively, then a single byte for format (0 for normal, 1 for compressed) and finally eleven unused bytes which should be set to 0.
The image data itself follows. The image is described row after row from left to right, and top to bottom.
If the file is not compressed, it is a raw dump of width × height byte values. 0x00 is fully transparent and 0xFF is fully opaque.
If the file is compressed, then it is read as segments. A segment starts with a single-byte code, whose value indicates whether the segment must be copied raw or must be expanded: if the value is less than than 128, the value+1 bytes are raw values; if the value is more than 128, the following byte is copied 257-value times. Then the next segment is parsed the same way, until the end of the file is reached.