Turn grayscale into alpha channel in Paint.net

I was unable to create the desired effect with blending, but there is a plug-in that offers this functionality: Alpha Mask. (I have no association with the author.) Download the ZIP file and extract the DLL to this folder:

C:\Program Files\paint.net\Effects

That adds an Alpha Mask... entry to the Effects menu. Using that menu item produces an Alpha Mask Settings dialog. To make the black parts of the mask produce full opacity, check Invert Mask. If the target image (that will be masked) isn't fully opaque everywhere, you might want to check Mix Alpha. You can use a mask image on your clipboard or load it from a file.

Using your mask on my avatar, I get this image:

(The result I got was actually transparent where appropriate, but that may have been lost in the upload.)