I found something on the rear of the gauge, but this turned out to be a magnet to catch metal filings.
The hydraulic unit is only connected to the workings of the lathe via a 3P+E electrical connection. The cross-feed makes no difference, although I did try it just to make sure!
Pressure in the manual is 150PSI, which is pretty much what it is.
In the end I stripped the unit on the back of the crossslide, and the master cylinder was seized, the stylus was moving due to it being on a linkage but the cylinder wasn't.
Now stripped and rebuilt and it's working fine 
thanks for your help!
Edited By Chris123 on 17/02/2014 22:46:03
Edited By Chris123 on 17/02/2014 22:48:26