It seems to happen whenever a ranged attack is used against me (e.g. devil or fire elemental fire attacks, warlock energy attacks). It certainly happens in real-time mode, but also in combat mode. It's rendered the game essentially unplayable, which really makes me cranky (especially when I'm as far into the game as I am).

One thought I had was that it could be a DirectX 9.x problem, since I just installed a new ATI 9500 video card with the updated DirectX stuff. However, I played the game for 20+ hours with no problems before this started happening all of a sudden.