Hi ckovacs:
You might want to give the New Fangled Wizards a try for generating code for simple things like a slot. The wizard takes the tool diameter input in the set-up file, and the tool number for the tool table height offset, and generates simple code, using all G40, no cutter comp codes. Things like slots, circles, hole patterns are super fast, and quick. It will show a tool path preview, and then post the code directly into your tool file screen, ready to go. The Wizards run without exiting Mach3.
To be off by .040" is a huge error. It could be a goofy cutter comp getting into the mix, or an erroneous tool table wear setting.
If you write a simple program by hand, to cut a square, about .100 deep, like 1.000 X 1.000, with no cutter comp, and measure with calipers, it should cut a 1.250 X 1.250 square.
M6 T1 (.250 cutter)
G43 H1
G0 X0.0 Y0.0 Z.1 M3
G1 Z-.100 F4
X1 Y0.0
Y1.0
X0.0
Y0.0
G0 Z.1 M5
M30
This will eliminate the machine as a problem. The machine program is telling Mach3 where to drive the cutter, and that is what it is doing. It will cut the shape "exactly wrong" every time, without fail.
John