I think its happening because the crafting table isn't a transparant block. I've tried to make textures for my pack in progress with gaps in them and the same thing happens.
I've still been looking for the lag source myself and after reading the theory on water as the cause I too made a no water world. Bam. It is the cause! I was flying around fast with no issues up until I found a village. At this village I saw some farms (which have water even with oceans set to sea level 1) and took a swim. My game nearly ground to a halt. After I got out and flew out of sight of the village, the lag ended completly. I even had distance set to ten, which runs badly on older (1.7.10 and less) versions. I therefore think that if this issue with water was fixed, 1.8 may be lag free. It's a stretch but at least our laggy enemy now has a face.
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I think its happening because the crafting table isn't a transparant block. I've tried to make textures for my pack in progress with gaps in them and the same thing happens.
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