Thanks guys! I read through it, I did manage finally tonight! I went down to 0.007" offset dowels and got it on the second try after doing the first try! I'm -0.0005 & +0.0050 = 0.00275"

I pulled the housing 3 times and rechecked it and i'm good. I may try seeing if i can get it any better but i'm under the max allowable of 0.005" FINALLY

The easiest way i found was to do a trial and find the true zero of that try ie. -0.030 & +0.060 true zero is +0.015. So once your back to 12:00 set the dial to 0.015 and then you get 0.045 as the max reading in both directions and once the dial is reading 0.045 you know move the housing in the direction of the indicator being positive or negative.

The guide 69taposer used is the way to go for sure over a dial indicator, and I agree the Lakewood bellhousing is a little frustrating in some respects. The dial indicator way isn't bad once you get it set up properly I ended up just using the base and the solid arm that attaches to it with the indicator attached to eliminate the extra arms and fittings that are truly a pain as thats the worst part of the process.