I've had a similar problem. When i entered the dungeons beneath stormfist castle, a red square kept appearing in front of me. The only solution was to reload a save game before this ocurred <img src="/ubbthreads/images/graemlins/disagree.gif" alt="" />
If you've had this problem from the beginning, i'd say there's something wrong with your graphics-card. I have a friend with the same problem in black and white. All the trees were in rainbow colors.
