Thanks for the replies and advice.
I downloaded an update of Mach 3, installed it and ran off my old xml file. The software now zeros after running G code and acts the way I expect.
I'm using proximity switches for home and limts, but have not got them working yet. I have had a bit of difficulty with the circuit. I had N/O switches in a parallel circuit, which is fine, but in my application I had them always closed and open on error, which of course does not register in a parallel circuit! Now I've figured out what was wrong I can get homing working.
1) you "Home" the machine with the Ref All button, not by zeroing the machine while in Machine Coordinates. Even though you are in machine coordinates, you're actually zeroing the current offset, as you can't zero an axis in machine coordinates other than the "Ref" buttons.
This is gold. Thank you.
I remember somewher that <ref all home> will only work if there are home/limit switches on all axes. Is this true?
I have tried the <ref> buttons on the diagnostics page. The Y works fine, but the X results in a horrible grinding that I put down to the 2nd (slaved) X motor turning in the wrong direction. Is it possible for jogging and cutting to work OK, but not <ref>?