Perhaps there is an issue in the material coding of the default canine manes. Not entirely sure how it could have changed as you said you hadn't tinkered with the files at all, but just to be safe.
Go into FeralHeart>media>materials and find the cmain.material file. Here you'll find code. Make your life easier with Ctrl+F to find the word mane. This will direct you to what makes the mane work...it should look like this, if it doesn't, copy and paste it in!
material CmaneMat
{
transparency_casts_shadows off
receive_shadows off
technique 1
{
pass
{
cull_hardware none
cull_software none
alpha_rejection greater_equal 128
fragment_program_ref Mane_PS
{
param_named_auto colorMod1 custom 1
}
texture_unit
{
texture fmaneMask.png
tex_coord_set 0
tex_address_mode clamp
filtering trilinear
}
texture_unit
{
texture fmaneShade.jpg
tex_coord_set 1
}
texture_unit
{
texture fmaneLight.jpg
tex_coord_set 2
}
}
}
technique 2
{
pass
{
cull_hardware none
cull_software none
alpha_rejection greater_equal 128
lighting off
texture_unit
{
texture fmaneMask.png
tex_address_mode clamp
filtering trilinear
colour_op_ex source1 src_manual src_manual 1 0 0 1
}
texture_unit
{
texture fmaneShade.jpg
colour_op modulate
}
}
pass
{
cull_hardware none
cull_software none
scene_blend add
depth_func equal
lighting off
texture_unit
{
texture fmaneLight.jpg
}
}
}
}
material CmaneMat2
{
technique 1
{
pass
{
cull_hardware none
cull_software none
scene_blend alpha_blend
depth_write off
fragment_program_ref Mane2_PS
{
param_named_auto colorMod1 custom 1
}
texture_unit
{
texture fmaneMask2.png
tex_coord_set 0
tex_address_mode clamp
filtering trilinear
}
texture_unit
{
texture fmaneShade.jpg
tex_coord_set 1
}
texture_unit
{
texture fmaneLight.jpg
tex_coord_set 2
}
}
}
technique 2
{
pass
{
cull_hardware none
cull_software none
scene_blend alpha_blend
depth_write off
lighting off
texture_unit
{
texture fmaneMask2.png
tex_address_mode clamp
filtering trilinear
colour_op_ex source1 src_manual src_manual 1 0 0 1
}
}
}
}
Now, there are two separate instances here, CmaneMat and CmaneMat2. Paste and replace over both of those, if appropriate.
One more thing to check, go to your masks folder (FeralHeart>media>textures>masks) and look for your mane textures. They are labeled as fmaneMask.png and fmaneMask2.png. Make sure these files are .png and not .jpg. Seems like the blockiness can be caused by lack of transparency.
If this doesn't work, then... install these back-up default FeralHeart files, for your material file
here.
Hope I could have helped!