Attached the sphere cam to simulate the worst case oscillation.  It's beyond what any commercial heading hold vehicle has to contend with.  The traditional method is adding ballast & using a large enough vehicle to keep it from oscillating.  Doing it with software will never make it as stable as the traditional method, but buys portability.

The lowpass P + highpass D filter was a total failure.  It simultaneously oscillated while being too delayed in tracking the heading.  The allpass P + highpass D filter was promising, but more erratic.  D needed a 1000x gain & P needed a 200x gain, which made the lion kingdom wonder if P was doing anything at all, but D had no DC offset without P.  

Suspect another term which highpasses the angular rate would improve it.