I've had the same problem a while ago: once I flew into a 100 mile high mountain in the south of France (same shape as the one in your picture) and on another occasion I noticed enormous hills in the Dutch polders. This was due to a mesh add-on I had installed for Europe. I removed it and the problem was solved. Maybe your VFR Terrain is causing the problem. Un-installing and re-installing it (or removing it permanently...) should do the trick.