What am I doing wrong? Probably everything. I think that I will try removing one of the weights and walking around again. There are markings to record the angle for center of gravity on the arm, but if you move the weight angle at all, this un-does the setting by throwing off the center of gravity. I've "homed" the weight by closing up the arm and positioning it as close as possible to the retracted arm.
There is a slot in the head piece where you can hold the handle at more of a 90 degree angle to steer is around corners when filming, but there is enough slop so that the camera will bounce from side to side if you use this option. Possibly a rubber or foam bushing in this area will help - or even some grease, but that's a last resort.
Note: All default settings on the HDR-HC7.