It would help to see a screen shot showing the problem.
Check your Layers panel. It sounds like you are placing the PSDs on a layer below your transparent (multiply) objects. Another possibility is that the layer the PSDs are on has its own transparency. Click on the small circle to the right of the layer name in the Layers panel, hen look at the Transparency panel.
Of course! I had thought about it and realized I didn't make a new layer before pasting in my image and it ended up on my lastbackground layer. One gets so involved fixing that the simple steps are missed. Thank you .As soon as I did, it came in correct as you suggested. NOw I can see the white of the layer edge outside the ragged frame I made, probably because I removed that transparent layer in photoshop.I had flattened that layer so it's gone. Mistake with that move. Is there an easy fix while it sits on my illustrator artwork now , to take out that bit of white edge or mute so that it just shows the ragged frame edge?
If you still have the file open in Photoshop you can use the History panel to undo the flattening. Otherwise you’ll have to re-mask the layer in Photoshop or create a clipping path in Illustrator or Photoshop. From your description of the image it sounds like a mask is better.