Sun is coming from the right, I'll try a render with no shadows. Here's a render made with normals flipped (in TG), so that's not the solution either (it's even stranger). I guess you're right, paq, that is has something to do with normals.
The process was; make simple trunk in LW, map in LW, enlarge 100x in Poseray and export as obj (vertices welded, normals smoothed, recalculated, and also saved), get rid of T-shapes of exported obj in Balancer (which often cause problems in MUD), import in MUD (indeed, there were UV problems mentioned, but I forgot what. But UV map is not exactly within boundaries of mapping area, that I know), increase vertex density 2 levels, sculpt, export as obj. Import in Poseray again, reduce size x0.01 to normal size again, save as obj, import in TG....
A normal map is applied, if you mean bump. I'll see what happens if I turn bump off. That may also be a sign of inverted polys, indeed. But I wouldn't know where they would have been inverted. What do you mean by 'killing the vertex normal channel'?
I'll get the trunk from my other machine and post if I can't figure this out.
Tree bark image is solid.