I still don't get it sorted.
I removed and deleted the Mesh, Topo and RealNZ Rotorua.
This is what it looks like --

I then installed the Mesh Topo combo CD again. I only added the Topo in FS9.
This is what it looks like --

Then I added the Mesh and this is what it looks like --

I dropped the TERRAIN_MAX_VERTEX_LEVEL from 21 to 19 and this is how it looks --

Then I changed it back to 21 and installed the RealNZ Rotorua and this how it looks --