Thanks JCL,
That definitely nailed the lighting issue.
Here's a pic of the seam in the sky and script if that helps:



script:

sky skycube
{
type = <free1+6.tga>;
layer = 1;
z=20;
material = mat_sky;
flags = cube,visible;
alpha=100;
}


sky sky_clouds
{
type = <foglayer.tga>; //Rolling Fog
layer = 3;
flags = dome,visible,transparent;
scale_x = 2;
scale_y = 2;
speed_u = 8;
speed_v = 12;
alpha=40;
}