Imported into 3d coat. You can now start drawing freely on the model!
I'm no artist, but this should do. Making the shirt a little shorter, because why not?
Next, export to PNG and name it the same. In my case I only modified hufch0003.png, so I'll export that.
Now, MAKE A BACKUP OF YOUR s3d file if you didn't already!
Open up the texture s3d file in EQ-Zip (in this case globalhuf_chr.s3d) and click the import files button. Accept the overwrite, and if it looks right in the archive, save!
Fire up EQ again and your changes should now be visible.