One thought about the needle pulling out... If it's a Singer needle, it's smaller at the top and more likely to fall out. You could try a Schmetz needle.
Treadle belts are readily available for less than $10. You could purchase a second belt and make it smaller and see if that helps. The rule I was taught about treadle belts is to wrap the belt around, mark where the cut end meets the belt. then drill a hole 3/4" smaller than that mark to put the staple into.