you need to try to understand your camera settings, f16 is a small aperture restricting the light and also allowing you to see more of the distracting background but your shutter speed is set for a high speed event so your camera has probably set the ISO in the 1000s to compensate for the lack of light. f4 and a shutter speed of 200 may be worth a go but depends on available light
This is why I don't like auto-iso, It's easy to forget what settings you're at when you're concentrating on the subject. It's best to keep the ISO as low as practical, setting it based on the light conditions and not changing it unless that changes. For this scene, ISO 200-400 would be sufficient.
There's something else going on here. See the horizontal lines throughout the shadows in the photo. I don't know much about the Pentax K10D camera, but my Nikon bodies would not do this given the same settings. I would just see more noise in the shadows, which I could improve in PP. DxOMark.com talks about built in noise reduction at ISO 400 and above. You might try turning off noise reduction and see if that helps. Also, I recommend shooting raw + jpg. Just guessing, but the raw file may not show the same artifacts.
As far as settings go 1/500 sec would be more than adequate (3 stop improvement) and I'd open the aperture more like f/8 (2 stop improvement). That 5 stops takes your ISO from 1600 to 100. I would probably go to 1/250 sec or even 1/125 sec and open up the aperture a couple of more stops to blur the background.