Time Machine backing up excluded folders

I've been having a lot of trouble with Time Machine lately. I used to have a 300GB partition on a second drive dedicated to backups. Time machine is set up to backup just my user directory and the calculated backup size is 200gb. There are a couple of folders on my desktop that I also exclude. I've had it working this way for months now (before Snow Leopard came out).

I started getting problems a few weeks ago. I formatted my Time Machine drive and got it to start a backup again, however, it kept running out of space without being able to complete the backup. I've been ignoring it since then because I knew I'd be getting some extra hard drives this week.

After my new hard drive reshuffle, I now have a 500gb drive dedicated to Time Machine backups. My backup size is still only 200gb but my initial backup would count up to 205gb/205gb or whatever it was and then keep going for hours with both the "done" and the "total amount" numbers gradually going up. It finally completed and I see that my 500gb drive only has about 30gb free or so. A bit of right clicking and get info clicking later and I soon find the root of the problem. The two large folders on my desktop that I've set to exclude have been backed up.

Any ideas on how to solve this? I've tried killing the time machine settings file in the library and have rebuilt the exclusion list from scratch. I've also reformatted the backup drive several times. I've zeroed it once. Partitioned it into 16 partitions and wiped it again into one. Honestly, I'm clutching at straws now.