Robin's idea of a shelf is a good one, you just have to make sure that the eggs can't rock and fall off the shelf and that the chicks can't fall down either or get their little legs/wings/heads stuck after hatching.
I'm sure that the hardware cloth is the problem with the humidity. Most people cut a hole the size of the neck of the bulb (they use a regular 60 or 75 watt bulb in this particular case) in the side or top of the container and seal it with any number of items like duct tape or caulk instead of the hardware cloth that you are using.
Here is a good example: http://theempoweredmom.blogspot.com/2010/04/how-to-make-homemade-egg-incubator.html
I'm sure that the hardware cloth is the problem with the humidity. Most people cut a hole the size of the neck of the bulb (they use a regular 60 or 75 watt bulb in this particular case) in the side or top of the container and seal it with any number of items like duct tape or caulk instead of the hardware cloth that you are using.
Here is a good example: http://theempoweredmom.blogspot.com/2010/04/how-to-make-homemade-egg-incubator.html
