I can post the TGD when I get home.
I can always bump up the GI resolution further (its set at 4 detail and 3 sample quality with supersampling right now), but I've seen stuff like this before (indirectly lit objects becoming flat and featureless, such as tree leaves being lit by skylight only) so I still wonder if it's just a limitation in the GI method Terragen uses.
Of course all of this is meant to be in the background of an animation so it probably doesn't even matter

And yes, the sun was postoworked. It is in the correct position though, as I used the Terragen sun disc as a guide for the flare
Edit: Sometimes I should really do more reading before posting....... looking at the section for Global illumination on the wiki it would appear that my GI settings are probably too low to resolve the detail in the clouds that are being lit indirectly.