Kev,
Your board looks somehow fat to me. I know the video is very close up, but I think the idea of it being swollen in the middle makes sense. I remember the centerboard on my X boat looked very skinny and there was plenty of room in the trunk.
I'm not sure about the X boat's centerboard, as I never did any repairs on one. But I have worked on a couple Mac rudders and daggerboard. They both had a wood core piece, running down the middle (like a hard wood 2X4 or 1x4).
I can see if the keel sat in water for years (like docked @ a marina) and in the down position. This wood could be soaked to the point that it has swollen considerably.
This may not normally happen, because the wood beam is factory sealed with resin/glass during construction. However, if the keel took a good blow, at some point, it can cause things to break loose inside, resulting in water being able to get to the wood.
I did notice some chips on the leading edge of your board, in the video.
The thing is........ we need to verify that the 26X center board had this wood stiffening piece, running down the center of it's interior.
Can anyone help answer this question?
The problem with sanding it, so it is narrow to fit the trunk without binding is..................
Much of the structure of the board is the outer shell itself. Start sanding through visible layers of the layup and you are weakening the overall structure. This, combined with a possibly soaked and mushy backbone (the possible wood piece I mentioned) could make the board too weak to withstand the forces that are placed on it during sailing.
Try this, as a test.................
1.Stand on the centerboard, while it is laying flat on a hard surface, right at that point where it is very clean. Put a little pressure on it, by lightly jumping and see if it feels squishy, under foot. If it does, there is something inside, holding a lot of water.
2. Drill a couple holes through the board (maybe around 3/8), right along the length of that white spot . First see if wet wood comes up in the drill shavings, or is it hollow all the way through. Do you see core material in there?
3. Put a couple bolts through the holes you drilled with large washers. Ad nuts and tighten. Are you able to squeeze the board thinner by tightening the bolts? And, does any water come out anywhere, like the drain holes?
If any of these conditions are the case, the board needs to be taken apart and re-built (which is involved, but doable), You would have to carefully cut the two halves apart, all the way around the board (along the leading and trailing edge and top and bottom).
I would call the factory and get the answer to the wood question, first, if no one here can answer that question (be sure and tell them the year, because construction methods may have changed through the years).
I don't know if they have them, but price a new one while on the phone too.
It looks like the centerboard comes loose, after just a little nudging. You may be able to use it for the rest of the season, as long as you are aware of the issue.
One thing you can do is............
When the boat is on the trailer, run a 1/4 rope up around the trailing edge of the centerboard, a foot or more from the bottom/back of the board (up in the trunk,there should be room in that area to get the rope up in there) . Then run both ends of this rope up into the cockpit (one port, one starboard) and tie the ends together. Now after the boat is launched, You can give this rope a pull to get the board out of the trunk and then gather the rope up at the stern.
Now you won't be stuck, wanting to sail with no board, at least

And Kev,............ keep the calm, I know it's frustrating sometimes with new experiences, but it's all going to work out
Hope I helped.
Best Breezes,
Steve K.
Mac 26D "Three Sheets"