The Little Machine Shop 5200 lathe package includes DROs on the cross slide and compound cranks. The readouts report the position of the crank, not the slide position, which isn’t a major problem on a lathe.
Unfortunately, the compound collides with the DRO on the cross slide:
That is a major problem on a lathe.
When you can’t turn the cross slide more than 45° from parallel with the bed, you cannot set the compound to the (typical) 29° degrees required for (traditional) thread cutting. That’s measured perpendicular to the bed, so it would be 61° on the compound rest scale, if the scale went that high:
This mess doesn’t have a trivial fix, because the DRO body under the (non-removable) display doesn’t quite clear the compound screw:
As nearly as I can tell, removing the entire DRO is the only way to slew the compound beyond 45°, but the DRO replaced the usual manual scale around the cross slide knob, so there’s no analog backup.
The DRO mounts to the cross slide with three screws, so you can’t rotate it 90° to the side to get better clearance:
The other four screws presumably mount the DRO encoder housing to the outer shell.
The setscrew sticking up from the sleeve anchors it to the cross slide shaft. The slit milled into the shaft captures the end of the setscrew:
The knob slides over the shaft, with a screw in the end holding it in place by friction against a split lockwasher; you can apply enough torque to turn the knob under the lockwasher in either direction.
Removing the DRO doesn’t produce more cross slide travel, because the DRO body sits flush with the back side of that large disk.
I think the cross slide knob collides with the compound DRO, but I put it all back together without any further exploration.
Actual 6 inch DROs based on linear encoders seem to run $40-ish and other folks have fitted them to their mini-lathes. Verily, I don’t do much threadcutting, so I’ll just put this mess on the far back burner.
That DRO ticks me off every time I look at it, though…
Dumb design, no question about it.
The Smell of Molten Projects in the Morning 
Maybe a 0.1″ shim between the compound and the carriage, and compensate by lowering all the tooling?
This would drive me crazy. I thread stuff on a weekly basis.
Having just re-eyeballed the situation, it’s worse than it looks. With the compound raised enough to clear the cross slide DRO, the compound DRO still collides with the cross slide crank.
The QC tool holders have about 9 mm of downward adjustment range, so that’s the limit of upward shimming. If I converted the cranks into smaller wheels, it’d come heartbreakingly close to working.
I don’t want to CNC the lathe, but a Joggy Thing with on-screen readouts would be an improvement… [mutter]
To be fair, every small lathe I’ve ever used has had serious problems with compounds at low angles, because there just isn’t room for the compound-slide crank. I think you need a center height of probably five inches before there’s space for a reasonable-radius compound crank that doesn’t hit the carriage.
Next suggestion: make an interposer between the end of the cross-slide and the encoder box, that has a 90 degree offset mounting hole, pushing the encoder out a bit (and rotating it, making reading it a huge pita). That again might only need to be just thick enough for some panhead screws to affix the adapter to the cross-slide.
Makes sense to me!
I’d hoped to rotate the readout without building anything, but that three hole mount aims it toward the floor. I just saw a writeup about replacing the cross slide crank with an extension (for a nut driver) that might come in handy: move & rotate the encoder as needed, build a shaft extension to suit, then maybe reuse the crank if it’s now out of the way.
More study is required, but I’m sure a 3D printed adapter would work well enough for quite a while. [grin]
Thanks for the suggestion!