Ok, so after a good night sleep and some time of not thinking about this issue, I was able to fix it.
As mentioned above I had already went through the guide and applied all known fixes and tricks. I had downloaded the Fix PS app from
http://planeshift.caarrie.org/ and applied all but the audio fix.
So 10 minutes ago, I decided to take a few steps back and try again. I knew the issue dealt with either Tiger or Video Card, so...
1) I used Fix PS to UNDO the X1600 fix.
2)Then I re-read the README-osx.txt file and to undo #4 which deals with shaders. But instead of removing the lines of text they ask you to add to the psclient.cfg, I actually changed the end words from 'false' to 'true'. like so;
Video.OpenGL.Shader.Cg.Enable.Fragment=true
Video.OpenGL.Shader.Cg.Enable.Vertex=true
And it worked, no more deathly shadows in Hydlaa anyways, I just started the game and because of the shadows have not left Hydlaa yet. Hopefully its good elsewhere. And I don't know which of the two actions I did fixed the problem.
Hope this helps other people. If this did help you, please reply here, I am very curious if I just had an isolated issue and the devs are reading this, laughing at how much of a noob I am.