I was not pleased with the Lovejoy couplings, but because they were part of the CNCfusion package I went with them. I would change to one of the spiral type if possible.
On the Mach version note you have a smoothstepper, and backlash comp is new to smoothstepper. If you go back to the old Mach version Im not sure you can run the latest SS plug-in. see the smoothstepper site for some explanation of backlash. Note the one case you are doing, single .001 steps is exactly what the SS does not yet handle.
ron ginger
http://plsntcov.8m.com