Now I have another problem:
As I pan around the static mesh, some surfaces disapear and others pop into view. It looks horrible and I honestly don't remember this being a problem earlier. Ugh, my brain feels like it has ground to a halt.
Earlier versions of the SM don't have this problem. The new version has a slightly different poly geometry and a different texture. (I can't see any differences in the static mesh or texture settings).
I originally noticed this problem when using a dds format texture file with DTX1 compression (1bit alpha channel). Earlier versions used a 32bit compressed .tga file. If use a tga format for the new texture I still have this problem.
If apply the new texture to the old static meshes I can't recreat this problem. This would indicate the change to the polys is causing the problem but there really isn't a significant difference. I think there is something else causing the problem but I have no idea.