Offhand it sounds like your running out of texture memory, or system memory in general.
I'll get grey textures myself, but when i get em, its the whole bloody ocean, inside the uboat, outside, etc. Everything washed out in a shade of grey. This usually happends to me when i quit and reload SH3 about 4 or 5 times in a row. Everytime the game loads it cach's memory and eventually i run out of it
