Rotating the level might not be the best solution for the following reasons:
-You abandon all options for any static lighting.
-A lot of recalculation would be neccessary on a per Tick base. Unless you aim at 2-4 fps, its not gonna work.
I would create the whole geometry in sections, as you said. Make a flat and a curved version of each section.
The player always walks on two flat sections. The curved versions of the sections behind and in front of those sections are streamed in. Once the player enters the second flat section, the curved section in fron of him changes to flat, the curved section behind him is streamed out and the now last section (former first flat one) changes to the curved version.
Awkward to explain, but I think you get what I mean…