Update: after couple hours of research, reinstallation and other experiments, problem traced to how Zurich textures were made/named. Apparently they share the same file names as a freeware Kathmandu scenery, specifically DDS files which seem to interfere with Zurich. Why this is so, I do not know.
No, the problem is NOT "how Zurich textures were made/named", the problem is that the author of that free Kathmandu scenery, named Antoine Calleja, has STOLEN lots of textures from Zurich, and included in the Kathmandu package found on Avsim see the attached screenshot using a file-compare utility, which shows all files that are included in the Zurich distribution and the Kathmandu archive on Avsim.
Some of them are bit-by-bit identical, others are only *slightly* modified with only a minimal change of color balance, to have the file looking "different" on a file compare, which proves files weren't there by accident. The red bus still has a Swiss texture, and the Dnata van still has a Zurich plate!
And it wasn't just textures, he also stolen the Zurich vehicle library: the VNKT_LIB_mzzi.BGL file contains the same vehicles .MDLs as Zurich, and he hasn't bothered to change the objects GUIDs or the "friendly name" property, so they still retain our original names, which were written in italian...you would wonder why an author with a name that sound spanish, which apparently lives in Malta, would call a van "furgoncino" (italian for "van"), had he made the object himself...
He probably made some mistakes too, that's why you were having visual problems, but I wouldn't lose any more time investigating why.
One should not have to choose between sceneries to make one work at the expense of the other.
If some freeware authors (this is not the first time parts of a commercial product ends up in a free scenery) had a bit more of ethic and tried to LEARN to do stuff, instead of just stealing it, you wouldn't had that problem to begin with.
The offending file has been reported to Avsim for removal.