After all the comments and trying with the belt tension looser, I believe that in addition to having excessive runout, I have been running the belt way too tight which is likely my problem (I never could get a consistent tone out of the belt strumming method). To set the looser tension I choose the limit to be just a bit tighter than the belt being able to climb out of the center track when slowly turning the crank and pushing the belt sideways just ahead of where the belt met the ring. If the belt climbed out of the center track and started to ride on top of the ring, I backed off and adjusted the eccentric just a bit tighter. Riding it over the weekend it performed well, but I still need to replace the BB (or bearings) as these are ruined. I believe the belt tension measures in the low 30lb range and the difference due to runout is fairly small.
I'd be curious of how others determine "loose" as "loose enough" or "too loose".