I just use sculptor tool for plane on blender. Then eported and imported to MED. MED not allowed to convert to .HMP so use .MDL - maybe this is problem? I only started with blender, trying to learn.
Some days before i tryied to use HMP terrains from one of world/level editors found in this forum and i had same bug is now, but in world/level editor terrain was really good working.
Files:
Blender terrain
MDL file
PNG skin