Third probably issue - you did something with sharpness settings that makes the cloud edges more pronounced. Something akin to this may be happening here. This will manifest itself as a 'line' visible through the clouds when the camera is about cloud height. A really easy test to see what I am talking about is to make the skydome.dds have a sharp amount of contrast between the sky and horizon (which often times makes the landscape look a lot better). During the day some issues related to this aren't really noticeable but problems can pop up at dawn/dusk. The other issue that might be happening here is to get the horizon extinction of clouds the game is blending them with the skydome. An easy "fix" for this is to run the game with supersampling, which at 2xSSAA will make the clouds render at native res. This is part of the jaggies on the bottom. Clouds are rendered at a lower resolution than what the screen is set to ie 1/2 res, 1/4 res, ect depending on settings.