Anyone know what causes this? Essentially the eyelash texture appears infront of the eyeball, instead of around it, Faendal has it, for instance.

Really wierd. Anyone know what causes this?

I have the same problem, don't know what causes it, but I easily fixed it with Creation Kit. Just selected all NPC's with the eye problem and exported their face gen data by hitting ctrl +F4. This created folders with the correct face meshes and textures in the Skyrim Data Folder. You don't even need a mod to be activated.