Yup Hazel is great wood.
Nice bow.
Heat treating the belly will help avoid set. Keeping it at least 2" wide and fairly long will also help.
A bit of set does no harm IMO. One of my fave 'go to' bows is a 40# Hazel bow V similar to that (but no levers), with a good bit of set. Shoots smooth as silk and puts an arrow where you are looking.
Personally I think levers are a waste of working limb length and just stress the inner limbs more... maybe that's why I've never made one yet. Could be I'm talking out my backside tho' as I do tend to go for nice slim tips.
I love Bark on Hazel bows.
Here's a more recent one of mine with some video of my Son shooting it. I went a tad longer that the one with set.
http://bowyersdiary.blogspot.co.uk/2012/10/bark-on-hazel-finished-pics.htmlIf you trawl back through the blog you can see the build. I don't think I heat treated that one. There's a few Hazel bows on my website (Delsbows) too including the "One Hour Bow"
A bit of set does lose performance in terms of speed, but can add smoothness. I think if you have no set at all then you aren't working the wood hard enough and are thus carrying excess weight. I've successfully heat treated bows that have already taken set. Search for 'Hickory Challenge' on my blog.
Where is the set? IF it's spread evenly, then the tiller is good, maybe just too much draw length for the bow. Heat treating can gain a fair bit of poundage (up to maybe 10#)... this will allow you to further thin the limbs to adjust both tiller and poundage to match the longer draw.
Looks to me as if the inner limbs are working harder than the outers.
Del
(BTW. Are you in the US, UK, or somewhere else?)