Thanks Michael

I created a cylinder in max and flipped all the normals. Exported it to FBX. Then created a new file and reimported it. Once I tried to flip the normals on all the faces the right way the crazy pattern showed again. So yep looks like a bug in max or the FBX plugin.

It seems to be fixable by converting from editable poly to mesh and back to editable poly.

I'll have to keep working with obj (quads and tris) in the meantime as there seems to be less problems with this format.