Can't get DK2 to work with steamVR -- The game is rendered on a virtual 2d window

I've reinstalled everything, including windows 10, several times. I'm running a powerful system with a 980gtx.

When I start ED : horizons, it recognises the DK2, and it appears to render fine on the splash screen, with full head tracking allowed. However, it then creates a virtual 2d screen, on which the game is rendered. Often, this screens POV is offset from the rendered game, so I'm looking at a window, which is looking at an offset window on which the game is being rendered. It's still 2d, but the game is clipped at the borders of the virtual screen, and head tracking moves me relative to the virtual screen, while the cockpit view stays centred, as it would on a monitor.

Weirdly, I get moments where it fixes itself, and the view is rendered properly, allowing me to look around the cockpit. However, the view is still off centre, such that my view is clipped with a black border. It also quickly snaps back to the virtual screen. As I said, I have reinstalled everything. I am running runtime 8.0, steamVR works fine in other games, I've run the setup many times, tried changing the tracker position, and updated my nvidia drivers. I've also tried the custom resolution hack, changed HDMI and usb ports for everything, and adjusted every steamVR and oculus setting. I'm at a complete loss, I can't even understand why this would happen; I an find no one else experiencing this bug. I assume openVR allows a virtual monitor, which is somehow being activated instead of the proper wrap around display. I don't have a clue how to fix it though... Does anyone have any ideas, or have you experienced the same thing?
 
I am running runtime 8.0

There's your problem. ED currently isn't optimized for direct to rift mode, and that is the only option for runtime 8. Elite is currently optimized for runtime 5. It can be downloaded here.

Make sure you uninstall your 8 runtime first before installing runtime 5. There are work arounds for getting runtime 8 to work, but my FPS in 8 was terrible. Im talking high 20 low 30 while driving on the surface with an i-7 4770k and a TitanX running with no sampling and med settings across the board.
 
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