I did use a mag base but I don't think it's sagging that much because I indicated the chucks very close together with a fairly short indicator arm.
I'm not entirely sure how I would attach a coaxial indicator to the main spindle chuck and then adjust it to the sub-spindle chuck. Maybe you could help me visualize how that could be done.
Some test indicators gravity extremely affects the inner workings of the unit. You can test this by using a piece of steel and attach the mag base to it and set the indicator to 0 with the indicator face pointing straight up. Then take the steel and indicator and move it over your head with the indicator facing downward to the ground and look at the reading (the indicator needle will move), then lower the assembly and the indicator will then go back to 0.
Some indicators are only affected by a few tenths via gravity whereas I have seen other indicators move by .010" or more.
A Co-Ax indicator is unaffected by gravity and usually the preferred indicator when using it in a horizontal fashion sweeping a diameter.