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Yo, I just had the same problem but I solved it. My code wasn't getting accepted ("not eligible") because my ESO account had no clue I already had the game on Steam, so I had to connect and synchronize them first. My Elsweyr code is from a third party vendor.
Here are a few things you'll need to do. If you have ESO on Steam but your DLC code is external:
1. Install the game through Steam. Let it download completely and update itself.
2. Go to the ESO website: https://www.elderscrollsonline.com/en-us/home
3. Create an ESO account there (confirm your email and all that). Log into it.
4. Exit Steam, or restart Steam. Then: Log into Steam through the same browser you logged into your ESO account
5. Start your Steam app too, and run the game and log in with your ESO account
6. The key is to have all 3 services actively running: Steam running, ESO website logged in and open, and TES:O (the game and launcher) running (and logged in)
7. With everything active and set up like this, go to your ESO account with Steam running/logged in (you can exit the game once you log in successfully)
8. On the ESO website, go to Account (upper left corner), then go to Linked Accounts, then look for the Steam button and link it (remember, you need to be logged into Steam at the same time, from the same computer, and the same browser. Basically the idea is to make the ESO website aware that you: A) Own the game and have it installed, and B) Connect to your Steam to verify that.
Link > https://account.elderscrollsonline.com/account/linked_accounts
9. Once you have linked the ESO and Steam accounts successfully, the Account tab in your ESO website should show that you own the game. Owning the game makes you eligible. THEN...
10. Go to Account (upper left corner) then -> Redeem Code
Link > https://account.elderscrollsonline.com/users/account
11. The code should work now and you should get a notification + emails. This notification can be slightly confusing so don't take it literally (it talks about "inventory" which is nonsense, it just got me looking for a nonexistent inventory for 30 minutes)
12. Give it some time (say, 5-10 minutes), then start the game from Steam. Let the launcher load properly, and click Play. Enter the game, and the Elsweyr cinematic should start playing.
Basically once you make the ESO website/account/service aware that you have the game on Steam, the code should work and everything should work properly.