The mechanical elements of the second prototype was assembled today and the gear drive was tested. Below is a short video of the gear drive in action (Note that the top plate is removed to share the gear movement. For this test, a temporary power supply was wired up with two 3.7V LiPo batteries to get a 7.4V power supply and a spare RC reciever was used to provide the signals.

The pillow blocks, servo mounts, and the servo gear are all off the shelf components. The shaft gear was custom made from gear stock. Below is a picture of the gear, which also includes a set screw for mounting to the shaft.

Here's an overhead view of the gear and servo on one half of the rotor.

The next step is to put the hub on the quadcopter to check the fit and the clearances. Then the quadcopter will be run with the hub in place to make sure that the assembly holds together. If that works then it'll be onto wiring up the prototype electronics and making the first set of blades.