I did the final experiments last weekend. It turns out that not being able to clamp the Millrite's table in the X direction (side to side) was a major cause of inaccuracy as well, although it caused no obvious drama or even motion once the 1/4" roughing drill was used.
This was verified by doing a row of 5/16" holes in a piece of 1/8" cold rolled steel while tightening the X-axis clamp knob with a big wrench. The holes landed within a thousandth or so of where they were supposed to, they all fit very tightly on a 5/16" drill blank, and the sides of the holes look very good, as if bored. Bingo!
So, the final process is:
Put spindle center over intended hole center, by any method.
Tighten X and Y axis clamps *firmly*. It should be very difficult to impossible to move the table with the X or Y handcranks.
Spot-drill, then rough drill through with 1/4" twist drill, then finish through drill with a 5/16" endmill, all the while slathering with black sulfur oil.
Repeat as needed.
So, my next project is to make a bigger and better X-axis clamp knob.
Joe Gwinn