Weird texture bug after U7

[veZela]

So, I updated DDO yesterday and everything went just fine. Then I started the game and i was in shock. First thing I noticed that my characters weapon (khopesh) was like 20 meters long (looked like a flagpole). After that I saw that this same stretching occured to many other things like barrels in a bar, dungeon entrances and so on. When I change the camera direction stretching disappears, but when I turn the camera again it comes back.

Here is screenshot about this problem.
http://www.mypicx.com/10222010/DDO_Bug/

So it is not all textures that stretch, only some of them and this weird stretching doesn't happen in any other game. DDO worked perfectly fine before updating. I have also just updated my graphics card drivers, but that didn't help. And there are no overheating problems (temperatures look just fine and no overclocking has been applied).

I noticed that DDO updated DirectX when doing update 7, although I was in belief that I had latest version that works on my computer (9.0c). Maybe that is causing some problems?

I have ATI HD 2600XT as my graphics card and OS is Windows XP 32bit.

Please help, anyone?