I once read a book about machining a few years back, it was printed in 1990, I'll try to find it. It touched on the factory in VA beach. Then, STIHL's tolerances were 1/100MM (0.0004") I'm sure they have only gotten tighter, however I don't see it as that important for a cylinder base.
As far as tooling, I hate to give up my source you guys gotta promise not to run the prices up, but here it is:
http://www.hoffonlineauctions.com
Going cheap on new tooling is a bad idea, but hoff has a lot of great deals on used stuff.
I've filled up two 40' shipping containers with machine tooling from them, and have made out like a bandit on most of it.
It takes a while toget it, and account set up is a PITA, but well worth it.
I'd use something like this to mill squish band, not a boring head.
View attachment 13152
@paragonbuilder if you end up with that mill shoot me a PM, I'm 50% sure that I'd have a NOS set of #9 BS collets, and 99% sure I'd have a set of good used ones.
Edit:
http://www.hoffonlineauctions.net/cgi-bin/mnlist.cgi?hoff49/6
There's a vert-horz table, probably go cheap.