The glitch appears as jagged lines on the surface textures, but only at certain distance. I don't think I'm seeing this in the more distant LOD landscape. Here's a bunch of pictures I took of the bug. I cropped them quite a bit, but they are not as far off as they might seem.
http://i.imgur.com/SG2Koqo.jpg
At this point I had been standing in the water so long that Frostfall started freezing me, applying a blurry shader to my screen. That *really* punched out these jagged lines for some reason. Maybe that implies it's a shader issue of some kind? I am really not an expert on these things though.
http://i.imgur.com/W9q6raF.jpg
Does anyone recognize what may be doing this? Ini setting? A mod? I will post my ini and modlist later, as I'm at work right now.