Not to be outdone, I just remembered I had another collet, call it collet #4. This was purchased from ebay from bluerangetools and is another 3.5 - 3mm.
Chucked up in the holder with the same tool resulted in 0.02mm of runout and this was repeated most of the time resulting in no measurable run out with only the predicted 0.01mm difference between 1 inch away and 2 inch at the tool end.

Guess I know what collet I'll use in the future for all of my PCB engraving needs!