I have had this issue before, but only when meshes were under a landscape piece. You can see what is happening here: http://grab.by/OeXG
Is this a known limitation of DFAO. If it is, it makes the feature practically useless for open world projects with caves and other features that intersect with landscapes.
EDIT: I should note that if I delete the landscape the cave entrance is sitting on, the DFAO goes back to normal.
Hi joshezzell -
The bug is still backlogged at the moment (UE-17667), but there is a workaround that comes at the cost of later optimizations that have come in for DFAO and Distance Fields in general.
This particular issue is caused by the Global Distance Field that is used to combine distance fields to make them more efficient. You can revert to the older method by using the CVar r.AOGlobalDistanceField 0
Distance Field AO is completely black underground - Rendering - Unreal Engine Forums
Thank You -