You can get this problem with a version of ImageMagick with PNG (and anything else) compiled in.
In my setup I'm on MacOSX with a binary download of ImageMagick in /usr/local/ImageMagick-6.6.1/bin and I'm running Rails under Apache/Passenger. I've got Paperclip installed as a plugin.
There are 3 steps needed to get this working:
1: Make sure you have ImageMagick working at the UNIX command line level. This involves adding it to your path and exporting these environment variables (pointing to your ImageMagick installation, of course)
MAGICK_HOME=/usr/local/ImageMagick-6.6.1
DYLD_LIBRARY_PATH=/usr/local/ImageMagick-6.6.1/lib
Check that identify works with your images at the command line level.
2: Tell Paperclip where to find the ImageMagick executables
In config/environment.rb add this at the bottom of the file
Paperclip.options[:command_path] = "/usr/local/ImageMagick-6.6.1/bin"
At this point, after restarting Passenger, you would see that 'identify' is run from within Paperclip but is not able to identify the file... the final step is...
3: Identify needs those two exported environment variables - and Apache/Passenger (or other web servers probably) does not pass those through by default!
In your passenger vhost file add these lines:
SetEnv MAGICK_HOME /usr/local/ImageMagick-6.6.1
SetEnv DYLD_LIBRARY_PATH /usr/local/ImageMagick-6.6.1/lib
Restart apache/passenger and it should work
Good Luck!