Bell-housing alignment help

good idea, but poor execution.
it is very hard to do this and get perfect numbers. Try this with you mag base and dial indicator: clamp the mag base to a piece of 3in piece of steel roundstock on your workbench: arrange the plunger of the dial indicator so it is placed on the same piece of round stock in line and close to the base as possible, zero the dial. Now, just roll the roundstock over on the edge of a bench, so that the bar is 180 degrees rotated and view the indicator dial, it will have moved. There is no way it should have moved. but it did.
You need to make the setup as light and as rigid as possible. In this situation, I would suggest screwing a stout bolt into the crank flange, and using an indicator clamp and something similar to a Starrett "last word" indicator, sweep the id. Keep everything as short as possible to minimize deflection.