Dico, I was able to check your suggestion only in A7, and yes if I remove d3d_entsort = 2; it works nearly properly. But when camera angle is lowered a bit, and moved close to units, the decal-shadows disappear again.
Later I try it in A8 too. Thanks.

the same in A8, but only happens when water mirror view is applied.
(I need entsort 2 because of proper close look of vegetation which becomes more dense in lod0)

I've sent an example to the Support Team. You can also take a look at it here:
Problems with PH_CHAR in 8.40.1

I found something weird related to the light engine. Here's a screenshot:



I have a terrain with terraintex3.fx shader (which blends 3 textures) and a light emitter which has a blue color set through its blue parameter. As you can see, the entities around receive the proper lightcolor, but the terrain receives just the opposite - red colored light. I'm not sure if the problem is in the shader itself (it's outdated after all) or not...

i think this could be a bgr/rgb related problem

@jcl: When I click on the download link in your first post, I get to download the very old version 8.03. I assume you've deleted the beta from your server because the update was moved to the download section, but I think you should change/ remove the link to avoid confusion.

Thanks for the comments - we've got the example, will look into the water mirror issue, and I've removed the link. Aquilis: if the problem was not also related to using the old shader version from A6, please contact Support and send them your project. They'll look into it. - Please post other issues with the current version to the bug forum.