Got it!!
Problem is that I set the theme in code on the OnCreate AS WELL as an attribute to the activity. So I remove the code from OnCreate and put the following attribute in my popup Activity class:
[Activity(Theme = "@style/PopupDialog")]
public class GameOverPopup : Activity
And my Styles.xml is:
<style name="PopupDialog" parent="android:style/Theme.Dialog">
<item name="android:windowBackground">@null</item>
<item name="android:padding">0dp</item>
</style>