I'm just throwing this out here, but you may have already tried this.
I had a case where while experimenting with HUD colors left me with a completely black hud, virtually invisible and utterly game breaking.
No amount of steam verification and even uninstalling and redownloading the entire game didn't fix it.
Thats when I remember developers tend to use the windows cache folders now rather than storing all configs in their own game folders (not really sure I like that, means you don't loose configs when reinstalling)
There are three folders in the appdata area, from FD one for the launcher and one for main config files and a third (I just discovered) that from the look of it holds a local save of your commander.
Since this folder is inside your user's folder windows has a direct symbolic link towards it.
Your save file is in:
open run command (win+r) and paste that in to open the folder directly.
Deleting this should just prompt you to download a new copy from FD's servers (that's where they really store it) so shouldn't loose your progress, back it up if you feel like it.
open run command (win+r) and paste that in to open the folder directly.
This Contains two more, "Frontier Developments" and "Frontier_Developments" the latter (with underscore) is for the launcher and the other contains most of the files associcated with settings and controls, you might want to back up your key bindings.
You should really only be required to delete the first folder since it holds you graphic settings etc, but for safe measures you might as well take the hammer to all of them.
Pardon me if this is so obvious that you have tried already.
But the 8bit graphics might sound like corrupted drivers, or DX install as well which would be a different matter entirely, and honestly easist way to fix is to reformat and reinstall windows.