I've fixed the mesh distortion bug. The problem was caused when rotating branch stacks (frames) to follow the branch spline. I was using a Fixed Up method that caused occasional twists and kinks in the branch mesh. I solved it by using the Parallel Transport Frame method described in Game Programming Gems 2.
The Way Forward
As the comments and questions continue to roll in on Woody3D I've been spending a lot of time thinking of ways to meet the demands of potential customers. Two requests rise above the rest. They are tool demos and source code.
I've created demo versions of the tools so everyone can play with the editors and get a feel for what is possible while experiencing the user interface first hand. The tool demos will be released with 1.0.3 in the Evaluation Kit hopefully later next week.
As for API source code... I guess it's a no-brainer. I'm currently working to get a source code version of the API to my customers which will also be released with 1.0.3. This will allow users to build the API into their applications on multiple platforms without being bothered with the binary libraries. I'm also deciding to release un-obfuscated shaders so users can modify them and maybe even make them better. Additionally I plan to create a C# version of the API and release it during the first quarter of next year.