stevehuck,
Frankly, the actual incremental change you are looking for is 0.0005".
The big picture question is ....Is it software, the lathe axis system, or setup along with actual machining the cause?
I am curious if the change is the same for reducing or enlarging a diameter.?
I suggest you do nothing other than do a simple test and then only make ONE change at a time
and see what happens for each change.
A gcode file for reducing and enlarging stock using the same tool, pullout distance, etc / keep it simple.
Air cut only and no need to run the spindle. You can setup to actualy measure and compare to DRO display or just visualy check the tool position.
RICH