I found the culprit files to be "Noise.min" & "Noise". These files are located in Mods,terrains,Nevada,vfstextures.
I copied the two files from a clean 2.5 install with Nevada into the latest 2.5 update and overwriting the existing two files and the problem was gone.
I suppose this is a new and upcoming feature for a future release, just my two cents worth.