Just thought I should give an update on it... This issue is still occurring on both my PCs.
I updated the graphics driver and 64-bit Java (I had update 21 32-bit, like you alluded to) on my Windows 8 PC. But, the cloud issue is still there. I have not yet tried updating Java on my Windows 7 PC with Intel graphics to see if it fixes that PC.
I have noticed something: I am not only able to see the change with the clouds if I watch the sky for a few seconds and/or move myself a few blocks, but I am also able to easily see the change in the clouds by putting a block in the cross-hair, especially if the block is above my height and in a clear area, and I am watching the clouds, of course.
Summary: The issue is still visible on both my PCs, even the one I updated graphics and Java on.
Here are two reports. I played for about a minute or so before crashing it, and I saw the problem occur during each time. These were both in creative, but it happens in survival as well. These were both on the Windows 8 PC.
Thanks!
An example. No changes were made to settings, I just moved 10-15 blocks and watched.
It has been awhile since anything happened on this report, so I am adding a quick update.
I am still encountering this issue, even after a fresh install of Minecraft. I deleted everything but saves before I started the reinstall. I also tried the snapshot, same issue.
This is still occurring on both my PCs.
I find it weird that this has not been reported by anyone else, so I am wondering if it could somehow be caused by my ISP (HughesNet) causing some sort of data corruption to a resource during the download. Could this be possible?
Thanks!