Strange Magitek bug

This starts withe the fight against the cranes on the airship (after escaping the Magitek Research Facility) when Setzer is in the party. Everything in that fight is visually messed up. From then on, my entire party is wearing magitek armor and some colors aren't right in combat. I can't find what causes this, and this even occurs when I load my game in the origional version.

Any insight would be helpful.