Hopper,
Sorry I spelt your name wrong in my post.
If you are doing the ER 20 conversion you will have to bore out to 20mm plus to get the collet in.
[Edit] No forget that it won't matter, too late at night here and any size will do it's just that there will be a transition line somewhere along the ER taper which won't matter anyway.
The ML7 spindle is quite a simple piece of turning in a non exotic steel, I believe they used EN8 left soft on the white metal version and onece you are at this stage it would not be a lot more work to make a new spindle, with a flange.
D1-3 would be well overkill for a 3 1/2" lathe but a straight stepped flange similar to the Chinese C3, C4, C6 series lathes with a simple shoulder, no taper, would be very easy to replicate.
It would give you safe reversing, a source of cheap back plates and chucks.
Fitting is also very easy.
Stolen from the Mini late site of a review on the Sieg SC8 lathe.
The rotating plate has three keyhole-shaped holes that rotate through about a 15-degree arc. After the nuts on the studs pass through the large end of the keyhole, the plate is rotated to bring the small end of the keyhole into place. Then the nuts are tightened down on the plate to lock the chuck securely in place.
One advantage of this system is that you don't need to hold the heavy chuck in place with one hand while using the other hand to attempt to get the nuts in place in the limited space behind the spindle. Another advantage is that the nuts stay with the chuck, so are much less likely to get lost or to drop into the gap between the ways as you're trying to install them. A third advantage is that installing and removing the chuck is quicker.


I have this system on my TOS with A1-4 chucks fitted, it's quick as the nuts always stay on the studs and it's impossible for them to vibrate loose as sometimes the D series camlock can under interupted cuts.