Weird overlay issues

Hello, I just bought this earlier, and this bug is really bothering me.

The game overlays get all messed up anytime I look in the sky with a construction weapon out.

I’m using the default settings the game had set up for me. (Pretty much everything set to High)

My system is:
3.33GHZ Celeron D(Yes, I know Celerons suck, but it’s all I could get)
2GB DDR2 Memory
Nvidia 8600GTS card with up to date drivers

Click images to enlarge.
http://a.imagehost.org/t/0431/gmod1.jpg

http://h.imagehost.org/t/0427/gmod2.jpg

I’m having thee same problem! If I find a solution, I’ll let you know.