Material Problem

Blood particles and water are messed up and little things like the vortigaunts eye being wireframe. The blood particles are wireframe for some reason and whenever I go under water the whole screen turns gray. Then when lag occurs half of the screen is wireframe and flashes different colors.

I have tried reinstalling it three times and it still has this problem. I use steam and every time i tried to reinstall it, it would jump to 51%. Whatever is wrong with the game, it seems steam is keeping it.

So I need a fix for this I have no idea how. I have tried everything. Any help would be greatly appreciated.

System hardware specs:
Operating System: Windows 2000 Professional (5.0, Build 2195) Service Pack 4
System Manufacturer: MICRO-STAR INC.
System Model: MS-6580
BIOS: Intel® Boot Agent Version 3.0
Processor: Intel® Pentium® 4 CPU 1.70GHz, ~1.7GHz
Memory: 1536MB RAM
DirectX Version: DirectX 9.0c (4.09.0000.0904)

Add-ons installed:
Kermites Weapons
NPC Pills

I made a video of it here:

Try defragging it. Or update video card.

I did both and neither fixed the problem.

So no one knows how to fix this?

Have you tried using -dxlevel 80

bump for knowing the answer :<

Your screen resolution is very low. Very low.

On-topic, try re-installing, cleaning GMod or defragging.
Or perhaps update your drivers.

We have the same problem. if your using -Dxlevel 90. its a lot better for ragdoll posing. but you cant spawn TF2 ragdolls. -Dxlevel 80 is just fine. but Its not lighting up the ragdolls. i prefer to -Dxlevel 90+. or 80.