Hack, thank you! You set me on a quest that leads me to conclude the barcodes mean "texture not found."
My texturing.bin file is a complete hack of the U.S. texturing.bin c. Summer 2011 when I was making ground textures. The fuss began with entry number two in the texture list, which referred to a substance called "Rock - Light". I was using this as my default rock texture, borrowing from the Kuju location:
Kuju\RailSimulatorUS\Environment\Terrain\Rock\Rock003
When I went looking for this texture, it no longer was there. In fact, the whole bloody Rock folder was gone. I had done a backup of things before TS2014, so a quick check of that archive revealed the Rock folder was intact just prior to the TS2014 upgrade. Is this a local problem or has everyone's textures been moved around?
What is even more interesting is that Rock003 no longer exists, period. Yet my route was drawing this rock texture on hillsides. Is there some internal mapping at work?
I then did as you suggested, and restored my Rock003 textures to my side of the world. I pushed the fog back a bit and here are the results:
DistantTerrain07.jpg
I am thunderstruck. I cannot believe the improvement, honestly. You can see the dry lake bed. You can see many many more mountains. I cannot describe how this completes my route.
I am also prepared to make these statements regarding the generation of distant terrain:
1. The generator will favor whatever painting you have done to your terrain first.
2. It will then use your default ground texture, default rock texture, and each of the three elevation textures, as described by PapaExpress, above.
3. Barcodes result because one or more of these textures is missing.
4. Taken together, these seem to indicate distant terrain generation has the biggest bang for the buck at the end of the route's painting process.
5. The generator will create season-specific files, so generation has to be done for each season that requires it. Generating in summer will generate defaults for the other three seasons.
6. I had the best luck generating from the route's origin point. If I strayed, I ended up with holes in the final results.
Related: I now have to audit my texturing.bin file to account for the file location changes.
Amazing stuff! Now, not to complain, but if we could just teach the mix map about satellite images, it would save me a LOT of painting...

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