You should look for wear of bedways, carriage, cross and top slide, check all gib srips, make adjustments as necessary.
1 thou of play on headstock bearings is also quite much. I have not more than 1/2 thou on my own ML7. When bearings are adjusted properly there will be no play (oil film is not compressible).
You may wish to clean bearings and spindle from all oil using petroleum and then check what your *real* play is.
If you get 3/4 up to 1 thou in "wiggle test" run that way, your bearings are fine.
Otherwise there will be shim adjustment or/and bearing scraping.
You also need o check for an *end play* of your spindle as that is a common reason of chatter (if found it is easy to correct by tightening screwed ring on the left side of spindle but do not forget to untight grub screw in that ring before doing so).
Making an old ML7 working as new and better is a never ending project. I have my ML 7 for ~20 years, refubished it from a scrap like to "as new" condition and have done plenty of upgrades. So bedways and mating surfaces were scraped in, headstock alligned (easier than many think – there is much of false mythology that it can only be done properly in factory setting), spindle and bearing replaced for phosphor bronze and hardened version, countershaft remade from hardened material, one of worn pulleys remade, oilers remade, tailstock barrel first remade but then I got S7 tailstock and now this one is used etc.
And of course old, not hardened spindle was not thrown away at all. Former owner have damaged tapered socket by boring it parallel (lathe crash) but for one job this spindle have proven invaluable.
When I needed to process ends of new precision leadscrew for my ML 7 purchased from McMaster Carr I have reinstalled back my old spindle for few days and damaged tapered socket *just* allowed to pass new leadscrew through the bore.
You will learn a lot of fitting art while proceeding with all such works.
Modern professional guy who operates CNC and nothing else may well look with envy on your skills after few years of such practice.
So good luck!
Martin
Edit:
Regarding "test bar with bobbins".
I have taken a 14 inch section of 20mm diameter hardened linear bearing shaft (they are cheap these days) and locited in 2 of 1-1/4" phosphor bronze bobbins on such a way to get a distance of 12 inch distance between them. They are turning very nicely without any chatter and measuring is pleasant and straightforward.
Martin
Edited By Martin Dowing on 12/02/2021 09:03:28