I set set the dial at 3.5, so that's not the issue.
I keep wondering if my cartridge is installed properly. I set it up using the single-point rega protractor, and it sits about 1mm beyond the arm. I thought that that extra weight out front could be the reason for my problem. But I've double checked it several times, and it seems to be installed correctly.
In the end, as you mention, Mofimadness, all that matters is the final VTF. But, again, I wonder if my inability to balance the arm is symptomatic of another problem.