[NoodleKnight]

It's not so much tension that causes chain de-rail/breaking, its alignment. #25 is more finicky because the chain is a lot smaller, correctly tensioning the chain helps some but if your alignment between sprockets is out of whack, the chain will hop off. #35 is a lot more forgiving, even if you had a noticable amout of slack in the chain, as long as your alignment is held true (and since it's housed in a box frame) it's not going to cause any real problems, unless you really hate backlash.

+1 on the keyway, pins and setscrews will only fail at this stage of the reduction, if you're having a hard time getting the machining done I can connect you to a few people =P.

As for that miter gear, I'd suggest just machining sleeves that sit on the shaft to prevent the gear from moving in any direction, if you make the gear adjustable in position then under the right circumstances it'll adjust itself (I'd actually just machine sleeves for the entire shaft, then you'll never have to worry about alignment during testing/competition). Then again, if you weld it in that works too, make sure you keep the keyway in there.