The prototype is finally working! The video above shows the prototype in action. Changes in the blade pitch correspond to changes in the thrust direction. The rivets were replace with AN470 1/8" diameter rivets (AN470-4). These rivets have 350 lbs of shear strength for a total of 2100 lbs of strength. The new blades have been tested 4 times now without the blades coming loose.
One of change was made to the batteries. It turns out the old batteries didn't have sufficient current capacity and the micro-controller would brown out while the gas engine was started. The new batteries are a similar form factor and have a 20C rating (20x the battery capacity). The capacity is slight smaller now (650 mAh vs. 900 mAh), but no more brownout issues!
More testing needs to be done on the physical hardware to ensure the design is adequate for flight testing. Additionally more work needs to be done to develop the firmware to add reliability. Once that's done the the other rotors can be completed and flight testing can begin!