System is Win7 64.
3DSMax 2010
Photoshop CS6
Create a simple or complex object in MAX. Assign multi-sub materials to it, and edit UVs. Create tga image files for the _co/_ca, _as, _nohq, and especially for this malfunction: _smdi. For the _co file, either leave it solid or give it a noise layer. Assign the textures in Max, triangulate, and export a selection of desired textured objects into 3ds format.
Import the object into Object Builder with "no squarize" ticked or unticked, and set up the surfaces for whatever LODs you are going to use; in my case, LOD0, View Pilot, Shadow, Geometry, Memory, Land contact, and that's it (until later). Create rvmats as supershaders: use eliteness to copy the code from another supershader used on a similar object as yours, paste into a text editor, and correct the file paths to the files of your object. Assign the _co textures and rvmats to the corresponding faces in Object Builder.
Testing in buldozer reveals the same issues as in game. So this is probably not a packing issue. So, open in buldozer and observe the blocky highlights shift as you move around the object.
If testing in game, make sure you have all the other pertinent files as usual: config.cpp, model.cfg, etc. Observe the hideous blocky highlights on the object change as you move the angles of your player or the object in the sunlight.