okay, ive had a look at what youve got. I wasnt able to reproduce your problem but have identified two things that look suspicious.
First thing: youve not saved your dds with the "generate mipmaps" option on. You MUST use this. Secondly, your texture is named fhe_master_d1.dds - You've added a 1 to the name to make the texture unique, but as bad luck would have it, thats the same way the engine identifies what LOD the texture is... except that 1 is not used, only d, d2 and d3 suffixes.
So, resave your dds with mipmaps on, and save it as something like: "fhe_master_stone_d.dds" and adjust the line in your .mao to match the new name.
Sorry im not able to try this, since ive not reproduced your issue... but i have a strong feeling one of those things will fix it.