How can I make a the lighter colors of a greyscale image transparent?

The effect you are after can be achieved:

• Duplicate the image layer containing the forrest image
• make the new layer black and white
• invert the colors (ctrl/cmd+i)
• on the black and white image: select all (ctrl or cmd + a)

• copy the selected

• click the original image

• create an image mask
• go into channels
• select mask channel

• paste

• hide the duplicated black and white image (that you used for the mask)

this should create a mask that makes the lighter areas more transparent.

Read more on the subject here: http://carijansen.com/2004/07/25/layer-mask-from-grayscale-image/