I used 1/4" square W1 steel bar, as I had some on hand.
I used my lathe to turn the ends, make the bearing slot and drill the bearing axle hole. I held the workpiece in the carriage mounted tool holder. Only thing I used the mill for was radiusing the ends (although this could also be...
You might want to check out this video:
Machines are a little larger than yours but the principles still apply.
Joe Pieczynski is an extraordinarily talented machinist. I always learn something whenever I watch his presentations.
FWIW, My Sherline is a short bed with inch calibrated hand wheels. I love it, and using suitable tooling as Jerry mentions in post #2 I find the bed length ideal. As far as self centering chucks, I use both the 3-jaw and the 4-jaw depending on the material I'm working with. On round...
I have used CRATEX rubberized abrasive wheels to polish escapement anchor faces, with excellent results.
Something like this might work on a smaller sized part:
Rubberized Points - Points - MSC Industrial Supply (mscdirect.com)
Unfortunately I have yet to see any Horological or other publication that deals with Micro machining or the use of micro tooling. Metal finishes for machined parts, is covered in a machinist handbook and can be readily observed at industrial machine tool shows.