I played for a while today and monitored my temp, the gpu was staying at 65C which is not hot at all (it would go to 70 when I play CoD4). Also I discovered alt-tabbing out of the game and back in fixes the problem , so it's not that big of a deal afterall.
Thanks for the help, guys!
It is nV's drivers screwing up. Somewhere along the line in the 100x series of drivers, they broke support for a lot of old games. A complaint was lodged with their driver team, but we aren't holding our collective breaths for a fix. Meanwhile, keep trying newer D3D9 Alpha builds.
It looks like we won't be able to provide any more help on this one. Keep an eye out for updated DX9 builds, maybe the dev team will fix this in another one.