no one will respond to this, so im guessing no.

There's a mod which fixes it though, here.

One of the devs said in chat last night, if I remember correctly, that fixing it caused a slew of new problems, and since magic is being overhauled for 1.1 anyway, they're not going to spend time trying.

Somebody on the journal thread about the new patch said it did fix this issue. He said he was hitting folks for 140 damage with fireball. He had five fire shards. Can anyone confirm it does or does not work?

140 seems a lot

I suspect the comments above were referring to me - I am finishing up a save game from when shards would randomly spawn so I have lots of shards. My sov has like 84 essence and fireball can do somewhere around 160dmg (according to the spell tab).

I amended my comment in the thread, though, because I haven't seen him do 160 but he has done more damage per shot than in 1.06. The AoE spell (Infernal?) often hits for 20+ dmg and I never had that happen before. Maybe it's just that attack/defense has been changed and it's made spells more potent?

In any case, when I started up the game in 1.07 I didn't have any fire shards (had some in my territory, but was holding off to not annoy the AI with "has all the shards"), so when I grabbed my first fire shard and went into combat it appeared to be applying due to that raised damage. Now that it's up to a potential around 160 and it's still maxing out in the 20s, I have to take back my statement.

[Edit]

Although I just did 86 points of damage with a child and she's only got 28 int, so something is definitely different.