From my experience, I have found that you need to make the four exterior corner pieces separately, then add the top pieces together, same for the bottom pieces and finally attach the bottom pieces to the top pieces - when making lone star quilts.
This quilt came to you with it being sewn all together and not checking it is squared up at the center points, and this was the cause of the bulge - this happened to me, so now I know how to make a lone star, without bulges.