Installed Thief Gold, unofficial patch and then the HD texture pack as per instructions. It seems there are parts where the fires are not showing any lighting around them. Light gem lights up near fire sources however it looks like i am in the shadows. this became a problem when guards would see me when i thought i was hidden. Some candles appear to be missing causing some light flickering near by. I am in the prison (early levels).

Anyone else experience this issue? any ideas on how to fix? tried changing graphic options with no luck

System i5, GTX 560, 8gb ram windows 7

Did you perhaps load a save that was made before you installed one of those patches? If so you'll need to restart the level.