Hi Brian:
From your further description, it looks like the button might be in seat 2, with seats 3-7 open?
If I get confused when I'm balancing tables, I always go back to first principles: I move the player that is supposed to BB at the old table, into the new table, preferably as the BB but if that seat is not available, then the next available seat. So if you move the BB at the old table to a BB's position at the new table (e.g. seat 4 is available here), you've moved one person. Now you just repeat it again for the next person (the UTG at the old table would have been the new BB, but he also must be moved, so he goes to the next seat available which is seat 5) and so on until the table are balanced.
The downside of moving players 1 & 2 at the short table to vacant seats is that you are now bringing new people behind seats 8 & 9, when in a standard balancing of tables, they should be behind 1 & 2. You may get some complaints about that.