messed up horizon

I don't know if this is common for FS2004, but I've noticed that when I am flying over a large body of water, the horizon is not flat. It sometimes goes off at weird angles. When I am flying over land, the ground right under the plane is nicely detailed, but off in the distance everything is blue.

Is this common with FS2004, or did I miss something in settings.

Everything else seems to be working well, it just gets a little frustrating when you are looking around to see what is ahead of you, and nothing looks recognizable as a land/water feature.

thanks