I have taken closer looks, many times,
And the only time Ive noticed LODs in action, was when model quality was set to very low, at all other time I saw the texture LOD but not the model LOD.
Im not ruling out a local problem, but it dose seem to be the cause of a serious FPS drop in and around villages, and in big battles.
and as you say, my rig runs the first TOW perfectly smooth, so its not likely my rig.