When the character is moving away (generally between 300-700m) from a rockface or cliff the textures seem to flicker back and forth between the different LOD textures.
This results in an effect like the reported z-fighting in destroyed buildings.
As with the z-fighting it's next to impossible to capture with a screenshot.
I get strange LOD bugs with buildings as well in the newest dev build. I can be around 100m from a building, and it will randomly flicker from a high LOD model to a low one, and back again. There must have been an update overnight, because I played with some friends last night and it was fine.
I'm not sure if it's the same issue, but in this video you can see what happen along the coastline and on rock formations when flying around in a helicopter: http://youtu.be/KJtkAzLIq-A
Seems like textures gets messed up when looked at through transparent materials. It may also be that the issue have to do with the line of sight being interrupted by object boundaries (the transparent box around objects) in general, as I noticed for example that, with binoculars, if I have a bush in my line of sight to a distant subject then the textures starts to get crazy, if I move sideways to get the bush limits out of the way, the texture looks fine.