Sometimes when running around, the entire game freezes for a few seconds and all objects+textures (including the character itself) gets the lowest LOD setting combined with a huge drop in FPS (going from 40+ FPS to 5-10).
See attached screenshot.
#edit: The solution appears to be removing startup options.
- Open steam library
- Right-click DayZ
- Open settings
- Click "Set startup options"
- Remove everything from the textfield (-noSpash appears to do no damage) {F31085} {F31086} {F31087}