Thanks for the replies. I have tried all these suggestions, but the problem is still there. I did the soapy water thing and overinflated it. No effect. I ended up blowing the tube, so I took the tire off and put a new tube on and the wobble is in the exact same place, which says it has to do with rim in that spot. The rim has a kind of black plastic strip along the outer edge on both sides in addition to the rim tape. However, I don't see any difference in the tape or the plastic strip that would cause the seating problem. Maybe the tool that pulls the tire out will work, but I don't have one, so I would have to take it to an LBS.

BTW: Never noticed any problems with the 26 x 2.25 mountain tires that were on it previously, but then again, big tires probably have more tolerance for such things, making it unnoticeable.

I will try riding it and see how much effect it has. As for the rim size, the rims are 559x17, so they should mount 26 x 1.25 tires.