...I noticed that there was black rubber under the belt cover, and opened it up, well the belt is proud in the pully, and was rubbing on the cover...
Mike, I know you have a lot on your plate right now setting-up your new baby but I have noticed that others with PM machines have had problems with the belt that comes with the lathe and I know that I noticed black material coming from the belt from the very beginning on my PM 1236-T. So it might not be the cover or the belt standing proud; it may just be a crummy stock belt? The last time I lifted the cover I noticed a large crack in the belt so I replaced it with a Gates BX24 TriPower belt. I am sure others my have suggestion for a replacement that is better but the Gates BX24 was inexpensive, has worked well and I no longer see the black material I saw with the stock belt.
Have fun!