UPDATE!!
When I posted the above message I did not know ATI has just offered a new driver a few days before. I just got my HD5770 working this weekend. I broke the normal troubleshooting "law" and made several changes all at once. Not sure which one made the difference but here is what I did.
1) powered down the whole system and cleared the CMOS with the jumper on the MB
2) swapped out the PCI power cord for the "extra" one that came with the PSU
3) plugged in the PCI power cord into the other modular PCI connector on the PSU
4) straightened the red & white wires on the HD5770 that plug into the video card next to the PCI power plug
5) updated the BOIS to the newest (F8)
6) Reset BIOS to my specific settings for RAID etc...
7) downloaded the whole Cadalist package dated 2-17-10
8.) restarted the system a couple of times and tested Dirt 2 and Premiere Elements
All apperars to be well at this time.
Not sure which change made a difference, but I am glad that is over!!!! (knock on wood)