What John and Bill are saying makes sense if you use the device to try and directly detect TDC. My little calclulator predicts that around TDC, 5 degrees is only about 0.1 mm (4 thou) and that takes a pretty high resolution instrument to detect (Bill will get close with his clock gauge, hence his 2 degrees which I reckon is about 1 thou).
However, once you get further down the stroke, the piston stop gives much better resolution and in the critical region of 5/16 to 3/8 inch should be fine as a datum. But for actual TDC, you can only use the 'bisection' principle which seems to imply a timing disc.
Was also thinking about Nigel's point about his gauge and translating readings through the geometry. I measured the angle of the plug hole as about 33 degrees to the vertical (how does this compare with what others think?). This means that the vertical travel is about 84% (cosine of the angle) of the distance measured by the instrument. However, strictly speaking, this will only work accurately for a flat top piston. If it is domed, the geometry will change a bit (although this may be a negligible secondary effect if we are only considering movements up in the 3/8 to 5/16 BTDC region).
Also reflecting Nigel's comments, I bet when some of us were poking 'sticks down holes' nearly 50 years ago, we would never have predicted our current level of interest in such things.
Alan