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I finally figured out a simple way to control backlash on the Z axis. Backlash, what a pain! First, drill and tap two holes, one in the saddle and one in the nut (length wise). The nut has to go on upside down for this setup. The indentation for the "ball" that fits in to lock the manual mill faces up. I also put the nut on the bottom of the saddle so it doesn't unscrew when the Z axis is at the top.

Bend a piece of aluminum or steel to make a bracket. Drill two holes that are LARGER then the bolt you plan to use for full adjustability. I drilled/tapped for a 3 mm bolt. Here is the setup thus far. It is pretty easy.

Here is an underside view of the entire assembly. Move the nut to

compensate for backlash and then tighten it down. That's it!

Top view of adjustable Z-axis backlash. Please note, this same setup works on the lathe except you have to grind the nut lever just a little so it does not hit the base of the lathe. Enjoy.

Adding Adjustable Z-Axis Backlash Compensation for CNC
(Same design for the manual or CNC lathe)

The Original Design.

I see that Sherline is now offering this way of backlash compensation but took credit for it.. Craig was kind enough to send me these kits for free for this idea! Thanks Craig!  Check it out HERE.