the issue is a lack of ventilation - the trick is to have good ventilation, but not too much - as that will dry out the eggs. Its a hard balance - too much humidity and they are too wet to hatch, too little & they are too dry - Since its a home made bator it sounds like you could use a little more ventilation - drill a 1/4 " hole on each side.
My home built bator has a computer fan to push the air around - that will help too w/o needing to add additional holes.
I also had condensation on the viewing window and when I changed hygrometer the new one read 80%. My incubator Warehouse thermometer/hygrometer tested right on but maybe the one you have is defective. Did you do a calibration test?
To calibrate a hygrometer you will need:
1/2 cup table salt
approximately 1/4 cup water
large resealable freezer bag
Place 1/2 cup of salt in the coffee cup, and add the water. Stir for a bit to totally saturate the salt. The salt won't dissolve in this amount of water; instead, the salt should have the consistency of wet sand.
Carefully place the cup containing the salt/water mix in a resealable plastic bag. Place the hygrometer in the bag, away from the cup of salt and water. Note: make sure none of the salt/water mix comes in direct contact with the hygrometer, or the hygrometer may be damaged. Completely seal the bag.
Place the sealed bag aside at room temperature for 8-12 hours. Pick a location free of drafts, out of direct sunlight, and away from heating or cooling vents. The temperature should be fairly constant.
After being in the sealed bag for 8-12 hours, check the reading of the hygrometer. It is best to read it while still in the bag, since if your house air is dry the reading may go down quickly once you take the hygrometer out of the bag.
The relative humidity in the sealed bag with the salt/water mix should be 75 percent.
If yours is the adjustable type, adjust the screw or setting so that it would have read 75 percent. You will have to do this very quickly, or remember how much you need to adjust the setting (e.g. for mine, it read 72 percent when it should have been 75 percent, so I would need to set it ahead by 3 percentage points). You may want to put the hygrometer back in the bag for another 8 hours to double check your adjustment.
If yours is not adjustable (like mine), simply make a note of how "off" your hygrometer reads. If it reads below 75 percent, you will need to add the difference to your actual readings. If your hygrometer read above 75 percent on the calibration, you will need to subtract the difference from your actual reading. Here are some examples to help:
Case 1: after sitting in the bag for calibration, my hygrometer read 72 percent. It should have read 75 percent, so the difference is 3 percent. I will now add 3 percent to the readings I take on the hygrometer (e.g. in a tank) to get the actual relative humidity.
Case 2: after calibrating in the bag, a hygrometer read 80 percent. It should have read 75 percent, a difference of 5 percent. I would have to subtract 5 percent from readings when using the hygrometer to get an accurate relative humidity.
Remember: always give a hygrometer about 2 hours to stabilize before taking a reading, as changes in the relative humidity may take a while to register accurately on a hygrometer.