With the ways displaying even wear, the lead screw is probably not OOS; the adjustment nuts have take-up. Correct, ideal end play is about .010-0.025. Testing with a gauge, an amount of dial should result in an equal displacement of table. A large vernier caliper, indicator and a 1-2-3 block will do. Put pins in the tee-slots [probably .625 Ø ] to align the caliper or a sine error will be introduced. Touch off one jaw [on the block] and raise the quill. Without disturbing the indicator, move X to other jaw face, lower quill and approach contact. A good approximation of error will show between the dial count and caliper. Backlash is not a dimensional error, it is mechanical. All Vee and ACME threads require clearance to operate. When for example you edge-find, the direction of movement is repeated for parts, backlash is compensated [actually not because it isn't introduced] for.
And save all that fluted carbide for serious alloys. They chip easily in soft materials, inserts less so.
Many people are disappointed, upon installing a DRO, and find little discrepancy between dials and digital.
Some masking tape on the table and another on the saddle marked with an inkpen can do the same thing. Believe me, there was a time 'we' machined parts and widely distributed features with no more tech than counting zero, two-hundred, four, six, eight.......16.938 or whatever. and no one can read a flashing DRO faster than watching the marks and catching increments with the dial.