since I downloaded it I cant get my oculus DK2 to work just says cant initialise the oculus!!!

Been using my DK2 with LFS happily for a couple of weeks now - but then I installed the latest G patch and now in game after I select 3D I get the message cannot initialise the rift headset?
anyone know how to solve this?(note I am running it with the 0.4.1 runtime which I used since I got the DK2) - I also get a blue light on the rift and run it in extended mode.

Just started using the RIft with LFS and its amazing!!
1)But just wondering the best settings to use with it (I mean should I run it in extended and what graphic settings such as AA and v sync give the best experience....
2)Also if you use headphones rather than speakers with it does it make the experience even better (I did read the Rift is meant to take advantage of positional audio?)