I am running the v4.2 of the mod. I've read in the readme file that an improvment eliminates totally an issue at reflections known as ''polygon effect''. What is it ??
I think rather than the problem comes from the fog's 3D model (with an annular shape, in scene.dat) which is not enough large compared to the sky's model. Did you change any of the two 3D models ?
I confirm that it's the bottom of the hill which disappears. What you see is only smallest hills further forward !
Another pic (with light fog) :