After a looong time things are finally landing upstream. Both vfio API update for vgpu local display support and support for that in the intel drm driver have been merged during the 4.16 merge window. Should not take too long to get the qemu changes merged upstream now, if all goes well the next release (2.12) will have it.

Tina Zhang wrote a nice blog article with both technical background and instructions for those who want play with it.