The pics help, Dan.
As I said the quill has quite a bit of what I will call run out when it is not locked and almost none when it is locked. That said all I have is a .001 reading DTI. I am in the process of purchasing a tenth reading DTI. On of the steps in the project is to drill precision diameter holes to hold bearings. I am concerned that quill run out will cause the holes to be enlarged. I will test this on scrap material first.
First, some basics. You are using a Dial Indicator (DI); some call it a Drop Indicator. It is useful for many things but for measuring run out on a spindle, you need a Dial Test Indicator (DTI). The needle of a DTI attaches to the body of the indicator via a hinge; this is the type you need for this sort of work and ideally, you want a tenths reading indicator (0.0001") with a decent range. I will send you a link to a good one by PM. A tenths reading DTI is too sensitive for general work, like aligning a milling vise or a part, but it is exactly what you need for assessing spindle concentricity like you're doing here. For general work, a 0.0005" DTI is more useful.
Regardless of how accurate the spindle is, drilling holes with a drill is not a precision process and probably not precise enough for bearing fits. For that, you need to bore the hole with a boring head and use some skill in doing it. Not to worry; that skill will come and you can ask the guys about boring heads. You are right though, in that excessive run out will affect the accuracy of whatever you mount in the spindle so an accurate spindle is important.
How accurate is the real question. There are no standards for Asian mills to my knowledge. My personal RF-31 spindle runs out at just under 0.0001"TIR but I think that anything under 0.0002"TIR would be pretty good. This run out stuff matters because it affects accuracy, tool life and finishes, and this applies to anything you put in the spindle. In my opinion, it is a good idea to get run out as low as you reasonably can. Unfortunately, I do not know how good you can get run out with properly preloaded stock tapered roller bearings.
As for measuring the run out of the quill, that matters only in that you want to assure the quill runs accurately in the head stock casting. You cannot adjust it but if it is really bad then you cannot fix it and you may as well scrap the mill. Yours sounds like it is fine. You can further evaluate it by pulling the quill out of the head and looking at it (and the inside of the head) for rub marks. If there is no excessive wear then the quill is probably just fine. Taiwanese mills are usually pretty accurately machined in this area so I expect yours will be okay ... fingers crossed.
This raises a couple of questions:
1. If the quill is locked is there any effect from the pulley spindle drive mechanism that can affect spindle run out?
2. With the quill locked if I read your note correctly the TIR on the inside of the spindle should be less than .0002.
3. If the TIR reading is within tolerance can the spindle bearings be regressed without removing the quill? I read one post that indicated the spindle could be removed from the top by removing the pulley and the upper nut holding the spindle thrust bearing in place. Is this easier than removing the quill? Is there an advantage to removing the quill first?
4. Are there bearings / surfaces in the spindle drive mechanism that require removal to be lubricated?
Thanks again for the post. It will take a couple of weeks from here to work through all of this.
1. Absolutely. The spindle runs in two bearings inside the quill; these are the spindle bearings. The top of the spindle is driven by the drive sleeve; the drive sleeve runs in a separate pair of bearings. The front pulley is pressed onto the drive sleeve and this is what transmits power from the motor. So, the motor drives the pulley, the pulley turns the drive sleeve, the drive sleeve turns the spindle and the spindle turns. You can imagine that if there is excessive play in either the drive sleeve bearings or the spindle bearings, run out will increase. This is not theoretical. I wrote up exploring this chain in the Rong Fu section of the forum; check it out.
2. 0.0002"TIR should be acceptable for hobby shop use, I think. You have to keep in mind that spindle run out is one thing but everything you run in that spindle will have its own run out - chucks, end mills, everything. Spindle run out magnifies the run out of everything else you put in the spindle and this is why we are seeking ridiculous amounts of precision in the spindle; we need to minimize the run out of the tools we use. For example, we know that for every 0.0001" of spindle run out, we reduce end mill life by 10%. If your spindle has 0.0003"TIR you are looking at a theoretical 30% reduction in the life of that end mill. This also affects the accuracy of the tool and the finish it can produce. In my point of view, it is wiser to spend the money to get the spindle accurate because this will save you money on every single tool you put in that spindle.
3. I think you are asking about how to access the spindle bearings for maintenance? If so, then here is the answer. No, in order to service the spindle bearings you must drop the quill out of the machine and press the spindle out of the quill. The upper spindle bearing will lift right out of the top of the quill once the spindle is out. The lower bearing can remain in place on the spindle. Then you can clean each bearing completely, re-pack it with grease, reinstall the spindle and adjust preload. This procedure is supposed to be done annually if the machine sees regular use but you can probably go a bit longer in a hobby shop. I don't want to bother with this that often, which is why I used sealed bearings that require no maintenance until they need changing.
Likewise, the drive sleeve bearings must be removed and serviced. No preload is used on these bearings but they do need to be cleaned and re-packed with grease periodically. Or you can just swap them out for sealed deep groove bearings and not have to maintain them at all.
I know this all sounds like a lot of work and it sort of is. However, if your spindle is otherwise in good shape but the bearings are junk then the spindle will not remain in good shape. That spindle is not hardened and the pounding it takes when bearings are not good will eventually wear that spindle taper; I had to replace my spindle because of this so believe me, this is true. My suggestion to you is to evaluate the spindle properly and if it is found to be out of spec, with maybe greater than 0.0002"TIR, then commit to replacing the spindle and drive sleeve bearings. I would highly recommend you use precision spindle bearings and if I were you, I would use sealed angular contact bearings instead of open tapered roller bearings that require periodic maintenance. I would use sealed deep groove ball bearings in the drive sleeve instead of unsealed radial bearings; the sealed deep groove bearings will take higher axial and radial loads and require no maintenance for the life of the bearing.
I forgot to emphasize that you should check the spindle taper. Put the needle of the DTI inside the spindle taper and slowly turn the spindle by hand. Watch the needle as you do this; if it moves much at all then that taper is worn and the spindle needs to be replaced. Do this check at three levels - 1/3 in, 1/2 in and 2/3 of the way in - if there is no significant needle movement at all three levels then your taper is probably fine. If it swings then the taper is out of round and should be replaced. MSC should still stock the spindle, I hope.
It is worth evaluating and sorting out your machine. Do it, and it will serve you well for many years.