I drilled and tapped the brake arm to accept the stylus at a distance of 10 centimeters from the center of the brake drum, then secured it in place with two nuts. The height of the brake arm is therefore adjustable, and should be set level. A 10 cm moment arm means that every gram registered on the digital scale will be approximately ten times the newton-meters of torque absorbed by the brake. So grams divided by 10 is ~ Newton-meters. From that, and RPM, Watts can be easily calculated.
With this work done, the Prony brake was operable, though I'm not finished. But I couldn't resist setting it up temporarily and trying it out!

I was disappointyed when at first the engine wouldn't start at all with the brake just sitting, applying no pressure to the drum. And for the first 15 minutes the engine ran I could hardly even touch the drum without nearly stopping the motor. But eventually the engine seemed to loosen up and gradually increase speed to the point where I could attach the brake arm...but without the adjustment springs... just letting the parts run together.
This brake definitely needs to be run in -- it needs more of that. But eventually this evening I was able to adjust the thumbscrews (without springs) for very slight pressure, and get the engine to run at reduced speed, registering a torque reading on the digital scale. I was gratified to see it was a reasonable stable digital reading, probably helped by the inertia of the brass stylus, which, unlike the other parts does not weigh on the drum.
Here's a picture of the first run. I do need to do a little more work to get easier and more consistent readings, to work out a measurement procedure, and to finish it off, but I'm very happy that it works quite well already!
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