try it at 20+ in an outdoor zone where you're not in a pit (i.e., not bhaflau or wajoam. somewhere like riverne or sky) the default 1-5 setting is very minor; basically it's just enough that the clipping pane isn't distracting, but not enough to actually make the game look like it has a real horizon.
is actually pretty low settings, although you seem to have found a good performance spot for your machine.
I realized after reading this that I didn't talk about what my settings were when I described my machine; so here it is:
1920x1200 overlay (monitor size)
3840x2400 rendering pane (2x overlay)
mipmap = no (is ugly in this game)
bumpmap = yes
weather = yes
animations = smooth
anisotropic = yes (although it's hard to tell...

)
shadows = high
I think that's everything relevant to the discussion?