I've experienced that kind of thing in a couple of other sims, namely Armed Assault and Wings Over Europe. In Wings Over Europe, I had to turn off shadows to stop it and in Armed Assault I think Geometry Instancing was the guilty party in the (ATI) Catalyst Control Centre.
However, it sounds very similar to a problem many have experienced with NVidia cards running Armed Assault (I know this because I spent a lot of time ploughing through threads on the Armed Assault forum trying to sort it out for my ATI card). Might be a long shot, but if nothing else works you may want to take a look on those forums (Bohemia Interactive website) and see if it offers you any clues. I do know some (NVidia card users) had suggested that they lost the problem by installing slightly older drivers, and yes, many were suggesting that overheating might be the cause on that site too, although most people suffering the problem regarded this as not being the case.
Of course this might not be the problem at all, but if you've tried everything else, I guess it's worth a try - good luck with it.
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