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Disable "Hardware tesselation" and it'll work fine.
Despite common misconception this is not a quality setting, it's just a different method of drawing curves using your GPU, however it doesn't really have much benefit outside of situation where you are bottlenecked by CPU which is very rare for PPSSPP and it's not as accurate, creating artifacts in many games like this one.
http://forums.ppsspp.org/showthread.php?tid=6594 - Custom PPSSPP Shaders!
http://forums.ppsspp.org/showthread.php?tid=3590&pid=117172#pid117172 - simple CE scripts to help creating CWCheats,
https://github.com/LunaMoo/PPSSPP_workarounds - CWCheat workarounds.