Hallo Jim,
has you seen my switch in the video?
That one has been sponsored for development from a forum member and with two times touch, first fast and second slow, it reaches an accuracy of about 0,01 mm
IMHO that is far good enough, otherwise you will have to go to more sophisticated systems. A friend of mine uses a digital indicator, connected to the machine, so he goes to the indicator with 25 mm measurement way and a resolution of 0,001 mm, stop in that range and read the value trough the RS232 to calculate the tool length.
Norbert