[fmedrano1977]

Ok, try this trick it worked for one time.

Change the resolution to 1920X1080p 3D apply that setting
Make sure kodi is not running
Now unplug the HDMI cable from Kaby Lake box then plug it back in
Now open kodi and see if the Hardware base is selectable.

I tried it but no luck unfortunately. I even rebooted after plugging in. I also tried different HDMI ports on my tv.
https://www.dropbox.com/s/x54fxe6omjljgr...2.jpg?dl=0

After hours of tinkering I finally got hardware option to show up. In the intel display settings app, I changed the 29Hz refresh rate to 60p Hz and it worked.