An attempt is made to understand the root spaces of Kac Moody algebras
of hyperbolic type, and in particular E(10), in terms of a DDF constr
uction appropriate to a subcritical compactified bosonic string. While
the level-one root spaces can be completely characterized in terms of
transversal DDF states (the level-zero elements just span the affine
subalgebra), longitudinal DDF states are shown to appear beyond level
one, In contrast to previous treatments of such algebras, we find it n
ecessary to make use of a rational extension of the self-dual root lat
tice as an auxiliary device, and to admit non-summable operators (in t
he sense of the vertex algebra formalism). We demonstrate the utility
of the method by completely analyzing a non-trivial level two root spa
ce, obtaining an explicit and comparatively simple representation for
it. We also emphasize the occurrence of several Virasoro algebras, who
se interrelation is expected to be crucial for a better understanding
of the complete structure of the Kac Moody algebra.