Just to add, this happened on the PC version of Kotor 2. It's happening only to the two characters I was with (Kreia and Bao-Dur). Sadly, I don't have any of previous saves anymore, or I would go back. Silly me, I thought one big bug with the starting conversation in that area (the hidden academy) was enough.
But on the up side of the problem, if I possess that character and play through him/her, everything is fine, as long as I don't have the other compromising character in my party.
I'm still open to any suggestions.
edit: One more thing. If it is possible, then I'd like someone else's saved game from just after they finished with the whole thing in the hidden academy, or just before it- after the second crash on the polar region on Telos. Is it possible to use someone else's saved game?