Here are my settings: Pardon Zevran there.

http://i187.photobucket.com/albums/x268/mnomaha/Untitled-1.jpg
And this is a guard walking around with a torch...
Well...since Steams POS community is down again, I can't show you. Basically, any time I have a torch, fire pit, etc., in my sight, the screen flashes some awful yellow/green colour with the actual fire being a bunch of lovely shaded pixels. Never had this happen before, so unsure as to what it is.
Thanks!
edit: Here it is: http://cloud-2.steampowered.com/ugc/542934584826412027/10362A0E8480BD56978EEF362979F94FB3BD03E4/