I'll explain as best I can, cause its largely educated guesswork, you may not need the
POLYGON for the lighting fix, its all the c_setminmax I think, but to make it the same as my experience,
I got you to put it in, you'll probably needed later anyway.

I had a similar problem myself with a terrain-model a while back.
The lighting stopped working a certain distance from the middle, the same distance in all directions.

So to test it, I had my 'player' model walking over the terrain, toward the dark, himself well lit the whole way,
but when he got there, he fell through the ground !!
Damn, the engine is using the HULL collision system, and unless you use c_setminmax, the
auto-generated default hull is too small for a terrain and doesnt reach the edges.
Suddenly, my lighting was fixed too!

I 'guess' the collision hull, or a phantom copy of it, is used by the lighting engine to calculate the
lighting/shadowing caused by dynamic lights.
So anything outside the 'lighting' hull doesnt get lit properly by dynamic lights, so by setting POLYGON ON or
at least c_setminmax, the 'lighting' hull gets adjusted to the "true" size of the model, and so the lighting now works correctly.

As an educated guess, anyways...