Well, you came to the right conclusion. Not much more to add.
On a side note, I don't think it's a smart idea to use wooden nocks like that. Have you ever seen them before? That's a good indication, because I haven't seen any succesful ones. One failure, but none came out good. There is a reason for that. Wood will split much more readily than horn. The forces the string applies to the nock, make the wood split. It just pulls the nock sideways, along the grain. The only reason you nocks survived thus far, is because you left them incredibly bulky. If you shaved them down a bit more like Del suggested, you will split the nocks in halves as soon as you brace the bow.
My suggestion for this bow would be to correct the tiller. At the moment it's agonizing to see. Correcting the tiller shouldn't take more than an hour and will greatly increase the longevity. It will still be a very mediocre bow at best, but at the moment it is just doomed to fail at one point. Also, do NOT sand those chrysals. Just remove the finish, but leave all the wood underneath. Correcting the tiller will alleviate some of the pressure from those chrysals.