I've been a'wondering about this for a while.
"Wondering 1".... was to use a DTI rather than a Dial Gauge and run the probe on the lower face of a groove in the main shaft. The ultimate version of this used a washer from a thrust bearing, as they are ground flat etc etc
"Wondering 2".... was to use a cranked lever to activate the Dial Gauge, as has been previously mentioned. Fiddle about with the ratios to get a more favourable stylus movement/indicator movement ratio
"Wondering 3".... Bill, in your last version, the one with a ball riding in the groove, the side loads on the indicator must be considerable, or is the indicator probe well located so that it can only move in and out, if you see what I mean?
cheers
Bill Pudney