Down at the very bottom is the Oculus setings, and stereo 3d settings. Change bHideGun=True to bHideGun=False.
That did it for me, however the gun (default UTGame gun) Is crazy long in the rift, and looks like its mounted to your face. Below are all the settings related to the Rift in the UDK baseEngine.ini Playwith at your own risk, as im not a UDK expert, and have no idea what might happen. I wonder what the HudDepth does.. HMMMM.
The same settings can be found in \ UDKGame\Config\UDKEngine.ini, I'm guessing you should change those settings instead of BaseEngine.ini. Also for the love of god don't turn on death animations, scared the hell out of me.