Thanks for the reply. I only had tree shadows on, i removed it. There was no change. I fiddled with a few other settings, to turn the graphics down and had no change.
I saved off my nehrim/data folder, then copied over the oblivion/data/textures folder contents to nehrim/data/textures folder. There are now 28 folders under textures. The faces are no longer black, and I do not see pink feet. I assume I won't see pink hands any more.
The game startup (from continue) shows the progress bar for a longer time now. I suppose I could delete some textures until the black or pink show up again, then I would know which ones were the culprit. This would take some time to do, and I would rather be playing the game.