Well I fixed my own problem.
I edited gamecon.c to provide support for the 2 hats when the controller is loaded as a DDR controller instead of a PSX pad. This way, the D-Pad is used as buttons instead of axes allowing the analog sticks to be the 4 axes that SDL sees. If anybody else wants this mod, I can provide a diff against the gamecon.c that's in 2.6.10