Evanegg. Your 2nd pic isn't showing up. If you did a simple reinstall the bad files will still be there. The only certain method is a complete uninstall, deleting the Combat Flight Simulator folder before doing a fresh install. This would mean losing all your addons unless you back them up first. If you have enough HD space you could do a duplicate install of CFS1. Simply rename the original Combat Flight Simulator folder to any other name, insert the CD & install in the usual way. You will now have 2 separate installations of CFS1 which will run independently.
I doubt this is a graphics problem.
PS. I just checked out your shot.
http://www.simviation.com/yabbuploads/Gunsight.JPGLook in the CFS1\Texture folder for a file named gunsight64.bmp. I suspect it's either missing or corrupt. You should be able to retrieve it from the CD.