I tried your demo out with my DK2 and my Leap motion. However, every single configuration I try keeps the guitar attached to the head tracking in the Oculus. I'm wondering, is this by design or am I experiencing a bug? You have done some AMAZING work regardless, I gave it a shot and it did work. However, I feel like if I could lean in and experience the full tracking while having the guitar forward facing, it would be much better IMO.
I'm also creating a game for this contest with a friend, so good luck to you sir. If you need help sorting this out, I may also be able to help.