Yup, that was it, so thank you good sir for a clue. I was pretty sure I had the latest NGIO version but apparently I was one behind. After updating & regenerating grass cache all works as intended. Well almost...
There is this one thing that annoys me a bit,so maybe you can help with this as well. There is this texture mismatch for the mountains in the distance at DYNDOLOD rendering distance. Most noticeable on the closer mountain on the right edge of the screenshot.
I know I can extend the distance DynDOLOD renders the objects and then they match - but it costs FPS.
Is there any way to match those textures using lower DynDOLOD rendering distance?