The thing in green rotates. The ball in blue is attached to the thing in green. The red balls holds it stationary, but allows it to rotate since its not the same craft. Understand more?
Also, might be a good idea to check out the craft file. Might make more sense than from pictures.
Mind putting up a picture?
I made some minor modifications. I switched out the landing gear for smaller ones, moved a wing panel back to make the CoL/CoM relation better (I suspect you had flipping issues, yes?), removed some of the RCS ports (there are two many, use RCS buildaid to optimize), clipped in slightly the NERVs to prevent tail strikes, and increased control authority on the canards and elevons slightly. As a recommendation, use RCS for translation and reaction wheels for rotation. Hangar pics below.
During flight it handled really well. (post slight modification) It SSTO'd fine, and had ~4000 m of DeltaV in orbit, so I don't see why it shouldn't work. It may have been a problem with your ascent profile, so I tried it out and put what I did below.
Annotated Pics of ascent below.
What seems to work best (in general) is to get to past 400 m/s on rapiers at sea level, then go up slowly (10-20 degree climb) before switching when the air breathing mode on the rapiers cut out.
Overall, its not too bad (apart from the CoM/CoL thing) for an SSTO, and should work fine. Just try practicing more.
Hope this helps. Modified craft file on KerbalX (link in signature).
EDIT:Also, the mods I'm playing with shouldn't affect stock performance. For the control authorities, it was 150 pitch on the canards and rear pitch elevons, and turning off roll on the vertical stabilizers
Can you show pics?
EDIT: I quickly built a craft with the parts at your disposal - see spoiler
Also, when burning at apoapsis, try pointing your craft down below the prograde marker to prevent the apoapsis from going up too much.
Have you also been doing gravity turns to get to 70 km or so?
qzgy's post in How to make Turret mounts and bearings? was marked as the answer