[Edit: I see that you already realized this. I failed scroll down before replying.]
"According to IRS rules, the pro‑rata rule is applied based on the IRA balance at the time of conversion."
False. The dates and order of the transactions are irrelevant to the tax treatment. The balance that is required to be used in determining the taxable amount is the year-end balance, not the balance at any other time during the year. It would seem that you have entered everything correctly, allowing TurboTax to do the correct pro-rata calculation on Form 8606.
