Thankfully, if the lines are unwinding from spools whose axes are perpendicular to the direction of the lines, we get one degree of kite freedom for free: the angle between the kite lines and the ground.  To get the other degree of freedom, we need to change the 'compass' angle of the spools, i.e. allow them to swing about the vertical axis so they're always aligned with the kite lines.  We still want to transmit tensile force and it would be much easier if the rest of the system (generator, transmission, etc) did not have to pivot as well.

Picture taking the headset of a bicycle, taking the front wheel off the fork and sticking it in the ground.  If the bike frame was angled in a way so that it didn't touch the ground, you could use that, and drive a hole through the bolt holding the headset, through which the kite-line can pass.

I'm pretty sure this would be tough with an actual bicycle headset, and it would be easier to make one from scratch*(comment 1).  I'm interested in thoughts on how easy or hard it would be to get a robust radial-thrust bearing held together by a hollow bolt that such a transmission line could pass through.

The steering doesn't directly dictate the pivot, rather it adjusts the direction of the kite, which pulls the steering subsystem causing it to pivot and face the kite.

Here's an animation of it in action...sort of.  We don't show the sum position of the planet and outer rings (corresponding to drive/recoil), just the relative position.  Both chain wheels are also moving together at a fixed ratio (3/4) either out (drive) or in (recoil).

Meanwhile, the steering subsystem pivots freely based on pull of the kite on the kite lines.

Other than the steering wheel, the rotational components of the lower section are not animated.

I'm interested in thoughts on the viability of this setup, and how hard it would be to construct.  Unlike the D/R and Steering sections, there aren't naturally broken up tasks here.  It's basically a single task to make an open-axis (hollow) radial thrust bearing where one component can be anchored into the ground, and the other can support the steering system's frame, and then attaching pulleys to guide the transmission line out from the Steering system to the D/R.