What do you do to reduce the nose bounce? I use scaling and damping, specifically on my VKB pedals, but I have not been able to eliminate it. My Roll and Pitch are smooth, its just the Yaw that seems to be the issue.

Steer away from dead bands and damping, no scaling on pich and roll. VKB does very well without it. Its when you pass through those zones, if used, is where nose bounce happens. I use zero dead bands, almost no damping on my VKB.
Rudder i use very little dead band, less than default, seems to need a scaling at about 50% straight across. I put the slider furtherest on the left just a notch below to ease the attack.