I did enough research on this to figure out what is going on but I have no way to resolve it with my current setup.

My TV supports only 480P and 1080i, and I have one of the older PS3 units.

The PS3 is just fine in the in 1080i mode but when the game starts it immediately changes to 480p. This means I get the scaled down menu that cuts off part of the text. It's a minor annoyance for game play but it does mean that it's not playing at 1080i.

From what I've read the issue does not affect the PS3 Slim model so it is an issue between the game and the system.

My only real solutions aren't practical in the short term. Get a Slim PS3 or get a TV that supports 780p are kinda costly options. Since my TV is at it's end of expected life (it doesn't even have a digital tuner) I'm opting for a new TV, but ether Sony or Bethesda needs to patch it so that it works properly.