Not sure if anyone else has had this problem, but here's a fix. If you have certain nvidia cards, you might notice it. This specifically affected Scourge banners and the banners on my Elekk. Here is a fix that worked for me. Some people claim it may cause WoW to crash sporadically, so keep that in mind.
Edit: This appears to affect the display of the runes on the DK blue-quality starting sword. If you apply this fix, there will be a dithering effect on the sword after logging back in.
Edit to the edit: I think I know why. Enabling this appears to disable fog distance occlusion, and you wind up with really weird effects when there is a thick fog and nothing is disappearing into it!