Yeah it's big, but the track that's for is designed to accommodate 1:5 scale cars. I use 0deg motor timing to help torque out of the slower corners.
40 + 40 seems like alot, I thought you weren't meant to go past 65* total? Because more then that was actually retarding the timing...
As for the belt tension, my car had the same thing when it was stock. Since going to the alloy layshaft mount it's a lot better. I'm also running the modified belts now as well (the black ones). It gets better with use. Once the belt has a few runs on it it will loosen up. But check to make sure the tiny hole in the layshaft mount is facing the right way.