Have a look at "Why would TC470 belt shred?" on this site.
Move down to BobG's post with a link to http://uk.f2.pg.briefcase.yahoo.com/bjgrain
then select My Documents and then tc470blt.jpg.
This shows a photograph of how the belt should be seated. I seated mine differently the first time I changed it and had similar problems to the one you are describing.
Hope this helps.
Muppet
May 2004