Do you have any other mods besides Dark Waters activated? What you describe is not unlike running out of RAM for the game, which may or may not have anything to do with your computer RAM amount. Open LAA again, and make certain that it is indeed enabled on your SH4.exe file. If you are using the "Basic" configuration of LAA, there will be a checkmark in the "Step Two: Large Address Aware Flag" section. If there isn't, make certain that the SH4.exe is not write-protected. If that's all good, check for something running in the background of your computer that might possibly be "stealing" cycles. Windows Update on a Win10 machine can be a 'killer', so look if your computer is downloading an Update in the background before you start an SH4 session. SysTray can hold all sorts of culprits. Of course, do not shell-out to Windows if you can help it. I can't think of anything else, other than lack of adequate hard drive space, or the use of a 32-bit version of Windows, which can sometimes be worked around... ?? As for "smoke" textures, there are six "smoke" dds files in Stock and 10 in Dark Waters...
