I had the same hitch as yours without anti-sway device on my new-to-me TT and towed almost a whole season with it. The sway problem you are having I am quite familiar with. Playing with the chain link adjustment would have little effect on sway. Its main function is to distribute load between the front and rear axles of your TV thus prevent steering loss due to lifting of the front wheels. I eventually sold the hitch on CL and installed an Equal-i-zer WD hitch with built-in sway control. The result is night and day. (My justification for not simply add a friction sway control like yours is to avoid drilling holes on the TT frame. I am mechanically inclined and known to SCREW up anything.)
Your short wheel base TV and TT combo may have something to do with the sway but not as much as the generator you placed at the rear of your TT.
The ideal TW for towing is 12-15% of your TT GVW. Any load placed behind TT axle reduces TW. Once it's below 12% and you will not tow good.
From your posted fender measurement, your TW does not seem heavy enough to lift the front end thus I speculate your TW is low for your truck to start with. My suggestion is to weigh your TV/TT combo on a CAT scale. 1st pass, loaded combo, FA, RA and TT. 2nd pass, same as 1st pass except with WD spring bars relaxed. 3rd pass TV alone. Post your result here and there'll be lots of experienced members chime in to help. You can also search this forum for detail instruction on "How to weigh your rig".
To level your TT, you may want to get a longer shank than your existing one. The stock Eaz-lift one offers very little adjustment. Changing the pitch angle may give you more chain link adjustment but won't level your TT.
