You have to set the tool up just like you would on a mill, touch off on a surface and reset the DRO.
You can take a skim cut on the OD, measure, then move the X to the centerline and reset to zero if that's what your program uses for the origin.
Some use an origin that is above the part, say at 2.500 inches. It's up to you.
hlombard on my forum just made a
lathe probing screenset that uses parts of my probing set.
you can download it there.
Hoss