Here is a pic of a similar tunic... the officer in question must have transfered in from another branch and as the bavarian cavalry seems to be the only ones with this constalation, maybe that was his origin.
Now, this may sound like wishful thinking, but it is not... The loops on this (see post 7) are really low, and they are 3.6cm apart. No Iron Cross 1st class fits... I had thought one of the Bavarian higher MVOs, but not for an Leutnant. When I saw the card pictured here, I wondered if it may not have been for an observer badge as well? I think quite a few cavalry officers were also flyers?
Anyway, as I said, not wishful thinking on my part... I really wanted a Bavarian infantry officer... cavalry is pretty low on my list and I have never been interested in flyers (if thats what the badge was)