Ok so looks like Mach is seeing things correctly. From what I have gathered from Art, Mach counts the pulses going out of the parallel port and puts them into the DRO, so if the DRO shows correct then it should be unless there is a problem further out, ie hardware or noise issue.
Do you have separate drives on your machine so that you can easily swap them out, say swap the X for the Z and vice versa and then see if the Z still misbehaves or see if the problem goes to the X.
Hood