Did it leave the game and go back into it? Thats what happened to mine. I changed my video settings in game and then played a game and everything was purple. Then, when I changed them in game, left game, and got back in everything was perfectly fine.
Yea I think it's more a driver/game problem. Did you uninstall/clean the previous drivers before installing the new one? If not, you should uninstall them (you can also use a driver clean utility), delete any temp folder that could contains the vid drivers. Restart the computer and install the new drivers (not sure wich one were the best, you could try the 4.12). Restart the game, if it's still there, you'll have to play with the settings (AA,AF, mat_specular,mat_bumpmap etc.)
Defo driver problem, well you say you updated drivers go back to old 1`s that should sort it out, also you should use this little program Driver Cleaner 3 if you are installing or removing drivers works for ATI and NVID cards. Heres a link to D/L ---> http://www.drivercleaner.net/ just scroll down to bottom of page for D/L
:O Silly me should read all the post 1st sorry for link to driver cleaner as you already know about it :O