As mentioned PHD is very forgiving with a lot of things, including bad polar alignment. You'll get field rotation but tracking will still be spot on. Sounds like your problem is a mechanical problem, not a software problem.
Check the logs or enable the graph. Sounds like you have an oscillating problem. Likely to be balance (got to push the load not track the fall) or sticky gears/grease, could be anything. Wrong tracking rate on the mount [over compensating]. PEC wouldn't be an issue but I always have it off and let PHD do the corrections.
Make sure your calibration run is ok and track at 1s intervals minimum or you may chase the seeing. As Peter mentioned earlier it will also allow you to push the exposure on your guide camera and have more stars to pick from. You'll also get a better SNR. That should do the trick.
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