I'm having exactly
the same problem. When I first installed it did the same thing and after 2-3 reinstalls the game came out fine. Ran on Extreme settings for a couple weeks and when I just started it up again back to this crap
. It's not the graphics card in my case. I've tried 2 that run everything else perfectly: Crysis, Dragon Age, GTA 4, Bad Company 2, and many others. It's not the power supply like some have hinted at, have tried 2 of those that run fine too. It's just this f*ed up game! I have tried most solutions offered on this site and the stretched objects still are appearing. Just about to do 3rd install this time around. You can't blame it on your hardware when lots of people are having this same problem and complaining about it on different sites, most say they have more than adequate setups. You're lucky it helped replacing GPU. I've tried OG game install and the 1.03 update. Have updated everything else.
If anyone finds a definite fix let us know...
Win7 x64 7600
Phenom II 955 (have tried stock and @3.6GHz)
6GB DDR2 1066
2x Radeon 4890 1GB(tried crossfire 2x and single)[catalyst package 10.4, have tried from 10.2 on]
2x SATA 500GB, 1x SATA 1TB