I also had this problem; after taking a corpse's bag I couldn't remove ruined items from it.
May 10 2016
Under video settings, put clouds on maximum quality and you can see fine.
I thought I had this as a technical problem, but raising the weapon (space) solved it. This should be simplified (or at least covered by a tutorial) for the final game. Lets start with the battery in the flashlight and always have the flashlight raised if it is on.