How on earth did you think to do that? I had sat around for hours fiddling around trying to figure it out. I would never thought of that. It really does work. I can certainly tell you that it works with a Radeon HD 4870 as well, with no 16bit colour problems that you describe. Still can't get sound through the HDMI though. Visually, it's native pixel for pixel and perfect.
Well done and thank you kindly, sire. 