What the.... I get a WTF missing mesh on the loading screen now =/ . I used the PYFFI Automation Utility to automatically run on EVERYTHING inside the Oblivion - Meshes.BSA. Including the distantlod and trees folder. These probably shouldn't/couldn't be PYFFI'ed so the utility probably skipped them.
I see some files in the original unpacked Oblivion - Meshes.BSA that are not included in the optimized file output that the automator utility created with all of the optimized meshes. I assumed it automatically added the skipped files as well. I suppose my problem is that I did not overwrite the original meshes w/ the optimized meshes... and THEN repack.
Accordingly to Tomlong "The latest versions of PyFFI make the automated tool obsolete. They can even hinder PyFFI's functionality because of the size limitation criterion. The skip list and the automatic skipping of .egm files make those extra tools unnecessary"
To properly optimize Vanilla Oblvion Meshes I suggest to look at http://tesivpositive.animolious.com/?page=pyffi , while for any other Meshes folders just right-click them and select "optimize with Pyffi".
And btw, be sure to use the latest release (2.1.5)