Disappearing detail ground textures?

[Snake]

My ground textures all turn into one single texture when you get close to them but I can't figure out why.. I get this in SPTest:
Message Severity: 3
.\graphics\pc\shaders\pcTerrainShader.cpp(176)
pcTerrainShader: detail texture expects L8 format!

[Phobos]

Make sure you are using a bumpmap tga for each texture layer and that they are saved with RLE compression off. Then do a clean munge and see if it still happening.