Wow! great work Vince. i have run one of these machines and still have one at my shop, although not in use currently due to a drive failure. for tool holders, keep your eyes open on ebay they pop up quite often. also you can make your own tool holders. its not that hard, the factory peices are nice because they have built in adjusters, but for an occasional user you can shim tools just like on any other lathe.

the hardest part i found out is to find decent tooling because the holders are all 1/2 inch. i had to take 5/8 and 3/4 tooling and mill it down to get the negative rake tool holders i needed.

for setting a drill, hardinge has a setup bar, you can still buy them new or they pop up on ebay every so often. basically its a bar that has a 1" shank and then a 5/8 step and a 3/4 step. to chuck up the 1" shank into the collet and then bring the tool position up to it. keep the tool holder loose and ride it up onto the 5/8 or 3/4 shank and then tighten down the holder. then back off the x axis and your holder is on zero. since i am running alot of carbide drills now we actually take a dial indicator and sweep the bores of the tool holders to set center. the setup bars were just not accurate enough in finding zero when using small diameter drills.

in terms of breaking chips in the bore there are alot of different techniques, alot depends on the material your cutting, but the best advice i have is use the speeds and feed recommended by the insert manufacturer and get the correct insert for the material being cut.

i wanted to attach a hardinge tooling catalog for you but its 916 kb and it won't take it. pm me with your email and i'll get it to you.