Runout - it's the chuck.

 
The dial gauge and stand arrived today. I had taken the chucks off both the machines in preparation. Measuring the runout at the spindle nose (both external and internal) returned a value on the Metric Dial Gauge that was so small it was unreadable. Certainly less than 0.01mm or 0.0005 inches.
My heart lifted. The new machine is just as accurate as the old one.

Putting the chuck back on the SL and chucking a piece of steel rod gave a readout of around 0.03mm at 2 1/2 inches from the chuck. well within the spec of the machine.
Trying the same thing on the Mk4 gave around 0.08mm, quite a bit worse.

I stripped down the chuck again and gave it another clean up. I ran a brand new 14M x 1mm tap through to clean up the thread which brought out a lot of crud. Poorly cut threads eh? I also went back over the entire chuck with a magnifier. Sure enough there was an index mark! So badly executed that I thought it was a machining mark! I re-assembled the chuck carefully locating the jaws back in the correct order.
Lo and behold, the runout is now identical on both machines! 0.03mm at 2 1/2 inches from the chuck face. COOL!

Next task is to take everything out of the upstairs workshop, pick up the antique bench drill on Sunday and then sort and put everything back so that real work can be done.

One of the things I want to do is try and fit my 'Dremel' rotary tools to the toolpost of the Mk4 and make a punch and die set. I am still waiting for my small machine vice and the milling column for the SL to turn up.