I toggled all the options in advanced with no luck. I then changed my ATI Catalyst Control settings from the defaults to higher quality, but that didn't make any difference. This started with the last patch, and I have no other issues with other games. All my temps are good, and I checked out my PSU with a power supply tester. Everything is nominal. I am at work right now, so I cant give you a DXdiag or screenshot, but when I get home I will.
Another thing I noticed that might be related is that during blackouts, the gradient from light to dark as you enter a full blackout is messed up. It almost looks like its running at a much lower color depth than before. Its not nearly as smooth as it used to be. The only way I can describe it is it's kind of like an old gray Scale monitor when you switch from 256 shades of gray to 16.