I am very interested in the outcome of this thread.
The Tormach has a bit of flex as its not a large machine, so therefore it wont be as rigid as one.
All cutters flex, my reason for using the shortest fattest one possible/practical.
side milling will accentuate the problem.
there is a reason finish cuts are called "spring passes"
It isnt surprising to me that the bottom of the square boss is wider at the bottom than at the top, the reverse is true for a pocket of equal depth.
I put an indicator in the vise, indicated a 3/4 piece of shafting in the spindle about an inch and a half down, with hand pressure of about 10 / 15 pounds I could flex the machine .0002 to .0003 in X, I didnt check Y.
my opinion, and everyone has one of those, is that a lot of the things mentioned will make it better but never eliminate it completely. Hopefully you can get it down to where it will meet the specs you need for this job............