I performed the driver rollback, then your Option 1. Upon reboot, everything remained the same; that is, the display is still huge and somewhat distorted. The ATI driver rollback is dated 7/25 and the version is 22.19.128.0.
As far as I can tell (it is hard to navigate or even see things), other things have changed as well with the last update. The "sleep" option on the power selection has disappeared, for example. I'm eager for other suggestions.