Hi Bill
From experience of building my first loco, a Simplex, using an ML7 and vertical slide, it's quite possible given a little patience to do all the milling for a fairly large loco entirely on a lathe and vertical slide combination. As I was on a very tight budget at the time with two young children, much of the drilling was done on the set up until I could get a pillar drill.
I used the fixed type slide, and various home made angle plates ( bits of scrap angle fly cut square on the cross slide!) combined with the Myford machine vice, things like connecting rods had to be fluted in two goes, but it's all achievable. I once visited the workshop of the late Bill Carter, who built two absolutely beautiful gold medal winning locomotives, with surprisingly limited equipment.
Obviously not as rigid or versatile as a milling machine, but it can be done and done well using a basic set up, my Simplex would never win any medals, but has given years of enjoyment, I've got a fairly well equipped workshop now, but it doesn't seem as much fun as my early efforts!
Many of the older copies of the M.E from the 50's to the late 70's were based around the lathe only workshop, so are well worth reading for ideas on set ups for all sorts of machining challenges. I'm sure you won't be disappointed if you go ahead with the Myford/ vertical slide idea. Hope the above waffle is helpful.
Happy Christmas
Dave