You need to disable mouse look. I never used it. Never mindI'm probably a quarter of the way in, exploring the Bog of Tuonela. I've run into a pretty serious crash.
First, a quick comment on the Morgana quest from above: I remember having that issue when going through the original Chaos Conspiracy. I think it was because the quest required both killing Morgana AND killing all the witches. I had killed all the witches, but one of the corpses was out of bounds and I didn't collect it. The game didn't recognize that I had killed all the witches until I retrieved the one witch corpse with telekinesis. Then everything proceeded normally. I don't know what effect respawn times may have.
As for my crash:
Looking around in the town causes a CTD. It seems to be correlated with looking up at the sky, but not entirely. I can look up at the sky away from town without issue. I have killed all opponents in town, and I am on the southern edge. A few times I have triggered a crash by looking quickly around nearer the ground. Makes me think there's some other object that is triggering the crash. I haven't gone elsewhere yet, as you might imagine this makes progress fairly difficult -- especially since I get re-cursed every time I reload from a CTD.
I have installed your texture fixes in the patch, in case that's relevant. I am playing in mouse look mode. I haven't experienced crashes anywhere else in the game. In Sutter's Bay and Elessian (sp?) Isles the ground around the town disappears at some compass points, but nothing else is affected. That's the only other graphical glitch I've seen.
Great mod so far, just hope I can find a solution for that Bog CTD!
Edit: I triggered a crash by looking south, well away from the town. It definitely seems to be sky related. The only other thing is that I can consistently trigger a crash by standing south of the town and sweeping my view toward the stables. I tried changing the graphical detail to Low, but crashes persisted. Crashes also still occur outside of mouse look mode.
Edit: Weird. I went inside some of the tunnels inside the town and looked up -- crash. Never saw the sky, just looked up -- this time at the ceiling. Big problems when you can't look up in a zone filled with flyers!