so one other thig:
check modules section, perhaps you've got some non default module for 1.5 version that changes this with some css styles included to the admin page.
(this module may be a part of 1.6 release)
So last night I went through all the modules. I check what was new versus my old backup (the one where everything is fine) and uninstalled anything that was different. Cleared caches, Recompiled pages and reloaded but the problem is still there. I still find it strange though that when I change the page it comes right and once the page is finished loading it goes all wonky again.