David,
Rubber bands are manufactuered from a tubing called Gooch tube. The tube is extruded before cut into bands. Good news is it can be purchased in the extruded tube form.
A good source for this is http://www.keenerrubber.com/
Althought the diameters you are seek are small Kenner...
Eliminating the rotating joint altogether seems like an attractive option.
Is it possible to enlarge the spikes on the mounting base and provide a spirit level (as suggested before) and simply instruct the user to attach the base to the tree in a level fashion while strapping it into place? By...