I am having this problem also. I will try updating the graphics card as suggested. Here are DxDiag from before, will upload an after and let you know if it is fixed.
Graphics info:
ATI Mobility RadeonHD 4570
ATI Radeon HD 3200 Graphics
Also an interesting note, my game was working fine, then my computer crashed, and upon restarting it and logging back into the same game, it went haywire.
Also attaching R3D logs for the game, noticed something really interesting:
0032kb| 2204.0000kb added| ERROR| ClientFacade::ProcessSingleEventImpl received gameplay packet outside of established gamestate with ID: 7
000105.724| 733948.0032kb| 944.0000kb added| ERROR| ClientFacade::ProcessSingleEventImpl received gameplay packet outside of established gamestate with ID: 7
000106.126| 735756.0032kb| 1808.0000kb added| ERROR| ClientFacade::ProcessSingleEventImpl received gameplay packet outside of established gamestate with ID: 7
000106.126| 735756.0032kb| 0.0000kb added| ERROR| ClientFacade::ProcessSingleEventImpl received gameplay packet outside of established gamestate with ID: 7
000106.126| 735756.0032kb| 0.0000kb added| ERROR| ClientFacade::ProcessSingleEventImpl received gameplay packet outside of established gamestate with ID: 104
000106.126| 735756.
A lot of those lines, which I have never seen in R3D logs before.
Definitely the ATI Graphics Driver, uninstalled my graphics drivers for that, worked fine, re installed them, same stuff.