Shadows in Gmod look like shit

Hey, I just recently started to notice how shitty shadows look in my copy of gmod. They flicker, are rough and get artifacts in them. Shadow quality is set to max, dx level is 9. My vid card is not overheating, it reports temps of an average of 52 C. Its an MSI Radeon 4350, with full support for DX10, so there is definetly support for DX9 there. I never experience problems like this in other games so I suspect its something wrong with gmod. I have CS:S, HL2, HL2: Lost Coast and HL2:EP2 installed(the latter supposedly integrates better shadow rendering into gmod). I have tried removing addons to no avail. Any help would be greatly appreciated, as shadows really do look terrible.