According to lathes.co.uk, the spindle of the ML4 was bored through 19/32″ (which is about 31 thou smaller than 5/8″), so if yours is indeed bored 5/8″ my guess is that it was drilled from the outboard end and the drill stopped just short of the Morse taper.
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George
I love this forum! Forced back into bed by belly ache shortly after reading Andrew’s question, I pondered on my sickbed what on earth Myford could have been thinking to leave a step inside the spindle. Andrew describes a severe quality fail! Then I come back to find George’s guess, which I like: needing a bit more room, a previous owner drilled the spindle out to 5/8″ and botched it.
If drilled out from the back as George suggests, it’s unlikely the 5/8″ section is straight or round. How about boring the spindle to remove the step and correct 5/8″, assuming it needs TLC? Make a long boring bar, that just fits through the existing hole, take the chuck off to get closer, and bore from the cross-slide. I expect the bar will chatter, but no need to remove much metal.
Dave