Redneck Lathe DRO

Having digital read outs (DROs) on my mill has spoiled me, so I've been wanting to add them to my lathe. One idea I've seen has been to adapt inexpensive digital tire depth gauges bought on eBay for under $10. I tried this out tonight. Here's my proof of concept redneck lathe DRO:

I setup the lathe with a 3/4" diameter aluminum rod in the chuck and the DRO affixed to the saddle and cross slide with magnets. My goal was to turn the rod down to 1/2", which would require advancing the tool 1/8". (When turning down stock in lathe, since you're cutting a rotating piece, you divide the amount you want to remove in half, then move the cutting tool that amount. E.g., 0.75" - 0.5" = 0.25" to remove, thus you move the cutter in 0.125", or 1/8".)

Unfortunately, it's not going to work, as it's not accurate enough. I turned the stock down until the DRO read that I'd moved the cutter in 0.125", but when I measured the rod, I got 0.490". It was off by 1/1000" over such a small distance, which in metalworking terms is too coarse.

I'm going to go ahead and try the iGaging DROs, which a lot of mini mill and mini lathe owners have had good results with. I'm planning to install one for the cross slide and another for the compound.