I think it's be more informative to respond to specific questions than keep repeating Archimedes' principle which I'm glad to find you seem to comprehend (at least as described in an OW diver manual).
See the comments about donning/doffing cylinders. If you and your students can do that in horizontal trim with with the bolt snap attachments you seem to be using, kudos to you.
---------- Post added September 17th, 2014 at 12:26 PM ----------
I sent a detailed reply but it somehow got lost due to timeout. Here's the gist:
1. Donning/doffing of cylinders under water is an important skill. If you're inside a wreck, the floor is silty, and you gotta go through a restriction which entails unclipping a cylinder w/o silting out, doing so in horizontal trim is important. I find it hard to do so when there's no slack between the cam band and the bolt snap. See below.
2. The solutions to deal with floating AL80 cylinders to achieve good trim are potentially many. Among those only a small subset are used in practice which introduce the least complications in actual diving situations where, for example, unclipping cylinders may be required. Similarly, one could attach the cylinder cam bands with using a quick link which would "solve" the OP's low running cylinder problem. Not many would consider this a viable solution.
3. Without some slack, I've found it difficult to do donning/doffing of heavy steel cylinders under water in horizontal trim. That couple of inches of stretch, in my case, makes all the difference. If others can do that with the attachment method that gearhound seems to be using, kudos to them.
4. Yes, you're repeating Archimedes' principle. When I'm at the surface, even with venting the air from my drysuit, the volume is greater than at 10 feet. At higher depth, I add just enough air to reduce squeeze but do not compensate all the volume lost due to compressed gas by adding commensurate gas. I do so through the wing. With the weight I'm wearing for thick undergarment, only compensating part of the volume lost in my drysuit through equalization, and the neoprene hood compressed maximally at depth, I find lift in the mid-30's to be marginal. This has been, in my experience, a shared experience by some cold water divers, but apparently not all agree.