MAJOR UPDATE:
I've got great video example of this problem manifesting itself outside of Arete in a major and chaotic way. Please be patient and sit throught the entire 5 minute material, as the changes occur literally in a split second:
https://www.youtube.com/watch?v=txpEEjYwyKk
This is driving me nuts. Short of wiping Windows and reinstalling everything, I have tried every troubleshooting step I can think of or was suggested by you or the sypport team.
The video example from Southern Artery Valley furthers my su****ion that it's a problem with the new engine's texture LOD mechanism. It just sux that it had to affect me, right as I wanted to start a video series on AO :/ Most people that I know are plagued by client crashes instead, so sure, I'll take texture problem over constant crashes any day (only crashed once or twice since installing the new engine beta), but it's no good for video production.
I'll be sending that video to the support team, as I'm sure it will help more than a text description and a couple of screenshot. Support team has informed the devs about this so here's for hoping...
@Caloss2: I'll try that tonight. Somehow I doubt it will do anything to fix my problem, but god rays man, god rays
P. S. Please excuse my language in the video, but it's just my frustration levels peaking.