Well, apart form the hiccup mentioned above, it works very well, I now have 10 tools set up and have tested each one - Z0 was the same in all cases once set with the Haimer, switching tools is just a matter of entering the right number in the "current tool" DRO.

The hiccup above "can" be worked around but it is a serious PITA - you have run the routine, go into reset, come out of reset, abort the routine, start again and this time it all works ok. So this means going in and out of reset twice for every  tool, not good.

I presume to fix this i will have to stump up the cash for the ENC module?
Will that mean it will all work with Mach active?
Does it still show up as a DRO?

Picture attached of my setter version 1

As for the remaining issue detailed above, I could very likely save time pi22ing around and just measure the tools and write the heights down then enter manually in the tool table, until funds allow the purchase of the ENC module.

Yes, the Enc module counts whether Mach is In or Out of Reset, so no probs there, obviously it is Out of Reset you will want..
The DRO is purely counts and you need a Brain or Macropump to scale that to your correct distance (ie setting steps per unit) and then you can write that to a user DRO or even the Encoder DRO in Mach, think that is what I use.
You will also need to rewire things a wee bit as you do not want the Index from the encoder going into the Enc module as that is what sets the DRO to zero and as such will do each revolution. CS-Lab said they would look into giving you an option to manually set zero but don't think they ever did. I got round it by simply having the Index on the Enc module pulsed from an output via a screen button.

Looking good, just make sure the angle part that touches the tool is flat and a true 90 degrees or you may get a variance from small to large dia tool. That is the reason my tool holder slides, I can set it so the tip of any size cutter is on a specific (machined) part of the setter.

Hood

Thanks. i'll save some funds up for the ENC module but at least i have a workable system now

Yes there is room for a small improvement in accuracy by re-working the angles etc, your sliding version is a neat fix, i can see a difference in about 0.6-0.1mm between my usual size tooling and my biggest tool which is a 50mm face mill. Clearly a small angular error but these are all stock parts used so not bad really, I know its there so i know what to do to fix it.

For my normal range of tooling from spotting drill to 14mm end mills/slot mills the accuracy is surprisingly good.