: Its a densely-woven twill, 8 oz. per yard, meant to be used for clothing...

That's liable to be one of the problems you're having. I use polyester fabric also for covering boats but it's aircraft dacron that can be heat shrunk. Yes it's quite a bit more expensive than that used for clothing, but it's also uncoated and untreated and intended for a similiar use and is stable under a variety of coatings.

I also wonder if you've allowed the first coating (Zar) to dry completely before you added the next coat.

Course this isn't going to fix the problem you're now having, sorry. Boat is very pretty and I think worth the work you're doing

Bill H.