I also converted the throttle to auto-centering.
Personally, I think that may be more hassle and danger than it is worth. FYI: All aLtitude helping modes (e.g. ALtitude Hold, ALtitude Vario, VelocityRoam, etc.) have a 20% deadband (+-10%) in the middle of the throttle stick so it is not hard to get it to stay at a fixed altitude, and when you are in that deadband it will not (should not) move (up or down) and doesn't need any kind of trimming. It is as if you are using ALtitude Hold; the code is the same. On the other hand, you must have low throttle for arming, and simply releasing the stick could cause it to go to half power, which you already say is very powerful.....
I would use a normal throttle (no spring) and get it flying and working well in ATitude mode with Manual thrust mode before advancing to any of the ALtitude Hold (baro helper) type of thrust modes. It's hard to debug a fancy flight mode when you don't even know if the basic functions it relies on are working...
When in the rate mode what is a conservative max bank angle. I am inclined to put in 1 but that may be a little low 
maybe 5-10 to start with?
Rate mode is not self leveling. It is entirely about roll rate. The bank angle stays what it was when you centered the stick. That can be banked 90 degrees or completely upside down. ATtitude mode is self leveling. The default max angle (Stabilization -> ATtitude) for that is 55 (degrees). You can certainly reduce that, but be aware that you are reducing your braking then too. I don't believe it is really necessary to reduce it for a beginner, it's not hard to learn to avoid slamming the sticks.
Is it possible that you were expecting Rate mode to automatically level it out for you? Is that your main problem?
I redid my calculations on the design and without the weight of the camera equipment the drone is seriously over powered. I need to add about 300g of extra weigh to put it in line with the design. ... The result is that the power to weight ratio is pegged. I assume this makes the a little touchy, hence the going bad fast behavior.
Removing weight will not destabilize the PIDs. Adding weight above where it was when you tuned it will a little. You may see a little oscillation. I have never seen it too bad in this case. A wobbly mounted camera or battery can also cause oscillations. These can be a bit worse. The fix for a wobbly camera gimbal may be to reduce the PIDs a bit. It will fly mushy a bit, but it won't oscillate.
Could you describe or link a video to show what it does when it "goes bad"? I can tell you that vibration is a bad enemy. Balance your props. Make sure (somehow) that it doesn't vibrate at any throttle setting (especially at any high power level). Vibration makes both the gyros and accels go crazy. Both of these can cause it to go very unlevel anywhere from quickly to slowly.
There is an issue that I call invisible oscillations (D-term oscillations). You don't see them because they are very small and very fast, but what happens is that the commands go from (say) full left roll to full right roll many times a second, but the result is that it is level. The piece you see,
especially with a high powered quad, is caused because you are only asking for say 20% power and to give full left you get 100% in the right motors and 0% in the left motors (50% average power), then it quickly switches to 100% left and 0% right. What you get is an average of 50% on all motors as soon as you add any power. If 50% power makes it climb like a rocket, then what you get is that it climbs like a rocket any time you go above zero throttle. The fix is to remove all D term in your PIDs. Generally you want to reduce P and I a bit (times .75 say?) then too. If you have AutoTune set up, you can just set Settings->SystemIdentSettings->DerivativeFactor to 0 and press the red up arrow to Save, then re-export (no need to fly tuning flight again) your AT based PIDs and it will do this for you. To re-export, you just switch your Flight Mode Switch into AT and back out to some other mode, quickly, three times (six clicks) (doesn't have to be armed). Thus you must of course have AT on your FMS.
And you must reboot the FC after putting AT on the FMS for AT to initialize correctly. You must power the quad with a flight battery for the RC receiver to get power to see the transmitter FMS. It is best to check the PIDs before and after to make sure they change. or you can watch it happen with GCS connected to FC with USB.