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Jim,
There is a company called Vermont that makes pin gauges. They offer 55 piece sets from .006-.060 in .0002 under and .0002 over. This should cover the hole sizes for most watches and clocks except for small ladies watches. I have seen the pivots of these as small as .004 or @ 1/10 of a millimeter. These sets can be purchased from most industrial tool supply houses such as M S C. For the lathe take a look at the made in China lathe sold by numerous mail order suppliers such as Sincere. The lathes are excellent machines for small parts requiring light cuts. The basic lathe including a cross slide and a collet holding tailstock can be purchased for less than $600.00. Accessories such as an extra long bed, dividing attachments, milling attachment, graver tool rest, a sensative drill press conversion kit, collets and chucks are affordable and available
David