After uninstalling, and reinstalling two times, it still used dx8.1...
CS:S went straight to DX9 after reinstalling it.
I found a config file in C:\Program Files\Valve\Steam\SteamApps\aposynthesi\half-life 2\hl2\cfg titled autoexec.cfg which was the problem.
mat_dxlevel was set to 80, so I figured that was 8.0. I switched it to 90, opened up HL2... ta-da!
Thanks for the help guys.