I don't really see any distortion that looks odd. Which of these do you mean?

1. The texture is smoothed out when up close.
2. When you move, the texture vibrates on blocks until the camera stops moving.
3. When you change the angle, model skins become distorted.

The solutions are as follows, for these:
1. Use the nofilter flag to get rid of the smoothing effect. I use it all the time, but use finer-looking textures instead. This, however, doesn't work with blocks as far as I know.
2. I haven't worked with blocks in ages as I make model-only levels, but during the time I was, I recall this issue. The effect amplified the further out blocks are from the origin. To fix it, though not tested, build parts of your level that are far from the origin as map entities.
3. I only recall this with the software rendering mode. A6 and the last half of A5 don't have this. The only known fix is to use smaller polygons.

If none of the three likely cases are what you're getting, please explain in more detail what happens. These are just the most likely causes, whether you use 16 or 24-bit color.