Looks something like graphics clipping, combine with a bad dds file or graphics card driver issue. I'm no PC expert however. Look where it starts, over yonder - 100 meters ahead or so, thats a clip area for track details/textures. I get the same effect (but its grey track so not so noticeable) when I make USER LOD: (0.25)
Setting User LOD to 1.0 might actually fix it for you...
Also try playing around with Texture MIP Bias (xx) settings in graphics menu.
Experiment with Track Detail Settings in the graphics menu:
-Wider screen increases LOD
-All scenery at Maximum LOD
-Texture MIP Bias
-Simple Track (if you have it)
-Full size textures etc etc etc.
Here you can see the difference User LOD seting makes. The track has less detail in the distance.
(my PC at work has onboard GPU - excuse the vomit graphics - but you get the idea) USER LOD 1.00 USER LOD 0.25
1) You might want to try a fresh install of LFS in another folder (might be corrupted dds files), keep your current install separate incase you need to go back to it.
2) Get lateset graphics drivers
3) Failing that - (If it was me) - Test some other games to see if it is your graphics hardware burning out or not.
Strange, I use that dds as well. No problems here. Although at one stage ('bout 2 weeks ago) it was reported that people couldn't download the CLC fernbay dds becuase it was corrupted. Maybe you downloaded it then. Unlucky.
Well at least you sorted it.
I cannot believe I did not see the centre-lines in you original post screeny! :doh: An obvious clue there. You might want to try re-downloading the dds for CLC. If you get an uncorrupted version working, it makes Caribbean Cruise so much more fun.