sounds like a graphics card driver issue.. When you say your drivers are all up to date, does that mean you've updated them after the problem started? if not, then do so, ...
Within STEAM there is a setting to verify local cache integrity, etc.. so try that as well if you haven't already...
See if you can monitor your temp of GPU.. to ensure its not overheating.. and also make sure you're running all default /stock settings for the GPU within ATI CCC
Q6600 quad @ 3.2
X-FI Extreme Music Sound Card
Zalman 9700 HSF