Should this dynamic resolution setup work?

Development Rendering
3

For Oculus, you need to use vr.oculus.PixelDensity.min and vr.oculus.PixelDensity.max

And TAA upsampling is bugged with dynamic resolution, but can work very well. To fix it, go to SceneRendering.cpp and change this line:
GEngine->StereoRenderingDevice->SetFinalViewRect(View.StereoPass, View.ViewRect);

to this:
GEngine->StereoRenderingDevice->SetFinalViewRect(View.StereoPass, View.UnscaledViewRect);