I have a 25 yr old knee mill with tapered tool holders that is (suddenly, or was it always this way? I know not) exibiting about 5 thou per inch of tool wobble. I checked the spindle and it is within a thou - ok for an old machine I thought - I think I can live with that.
Why is the tool off more that that the further I am from the spindle, how do I fix it (or get it fixed), and just in case I want a even more accurate machine, how would I get the spindle run out down as well?
Thanks!

(Why is the tool off more that that the further I am from the spindle)
The farther from the spindle you go the more run out you will have,your tool is at a slight angle from the spindle.Think of a dart board,at the center the lines are close but the farther you go out the farther apart the lines are.You may have a small bumpor a chip on the tool holder or in the spindle itself,just take some emery paper and clean them up,this allso goes for the tool holder itself.