The sliding contact to the scale is a weak point on these things, especially if it's an aluminum scale. Aluminum readily forms an oxide layer which makes the connection resistive and can cause problems like you're seeing. Take a look at the edge of the suspect scale to see if it has crud or oxide on it. Also: I think you could flip the scale around so the sliding contact is seeing a "fresh" surface. It _might_ work, depends on whether the vernier structure under the paint is centered or not.
I have a slightly newer set of Igaging DROs on my mill and they all developed problems like yours. After trying all sorts of things I found the best solution was to drill a hole on one end of the scale and use it to attach a wire with a spade connector. The other end of the wire was soldered to the sense head's internal ground (the same as used for the sliding contact). The wire was left long enough to accommodate the range of motion of the head vs. scale. So far the wires haven't broken but if they do, not difficult to replace. BTW I used stranded wire because it's much more flexible than solid.
Before taking the step of drilling holes in your scale(s), you can evaluate the possible benefit by using an alligator clip attached to the end of the scale. Just make sure it's contacting metal, not the plastic covering the vernier. Of course, you still will need to connect the other end of the wire to the read head's ground.
Other things that can cause the readings to jump around are nearly-exhausted bstteries and resistive contacts on the USB-like connector that goes between the read head and display module. I occasionally have to unplug/re-insert the connector to get the readings to settle down.
Earlier on in my quest to tame their "jumpiness" I soldered 1 microfarad capacitors across the read head's Vcc and Ground. That helped but did not totally eliminate the problem. I think these scales can exhibit similar symptoms due to a number of different issues, which may explain why it can be difficult to troubleshoot them.
FYI, after discovering the problem with the sliding contacts I have avoided buying Igaging DROs that use aluminum scales. The stainless steel versions are more expensive but seem to be less problematic. But I STILL find it necessary to add the capacitors......
