If you had the belt tight and it was still screeching, I bet the
problem was not belt tension. You probably have some worn pulleys or
the wrong belts, probably worn pulleys. You can accommodate this by
purchasing belts with a slightly greater angle of V so they don't slip
in those old glazed pulleys. Any NAPA store can tell you the angle of
the original and spec a different replacement.
Just over tightening the belt to quiet it will result in wear on the
components being turned. PepBoys did not do you a favor and they
charged you for the privilege. They will be happy to sell you a new
water pump, alternator, etc. when the time comes soon.

1/8" deflection?  Holy crap that's tight!  I'd be worried about
crunching an idler or alternator bearing..  Had a shop do something
similar on an old Firebird I owned.  They tightened the A/C  belt so
much they destroyed the bearings in the compressor.  

I think I'd hit the pullies with some 200 grit wet/dry paper and rough
'em up a bit to break the glaze on 'em and get the belt adjusted
properly.  I've always done 3/4" to 1" deflection and never had a
slipping (at least not an audible one) belt problem.