A couple suggestions
Is this happening in rate mode or heading hold mode.
Is the machine balanced well, vibration is horrible to piezo gyros.
The 8700g can only be used with pcm receivers.
Did you reduce your gain to see if the wagging went away?
You may want to move the piezo element (the silver part) to another location to see if there is less vibration.
Btw. I have a 550t with the JR DS8417 servo on a JR 549 (FM) in my venture and it works great. I only have to give minor trim adjustment when there are big temp changes.
Also, I'm around 50% gain with the ball link mounted 15mm from the center of the output shaft. I am just below the threshold of wagging @ 50%.
Hope this helps, Lucas