@Ulillillia: I have since removed stencil shadows from the demo, as its clearly buggy.

I think it is to do with angles, I think when the angle from the camera to the shadow is at a certain position, the shadows turn off. Maybe you could set up some kind of test rig as you seem to be very good at creating these...if you have time and inclination that is.

I am at a loss, but considering we are most likely going to use sphere for our shadows, its not a big issue for us. It was just something I have been meaning to bring up on these forums for some time.

Thanks for your input