The GCode is perfect, the the Z being the top of that part like I want it.

In the simulation, the Z that's shown in the "Move Table" is off by 3.5 inches. Well, it's not really off. I have no tool holder and the Overall Length of the tool (1.5") and the Protrusion Length (2") make up the 3.5 inches. So it seems that the Z in the tool table is the bottom of the spindle nose. Is that right?

How do I set the Overall Length and the Protrusion Length? My 1/8th end mill really only sticks out of the spindle .5 inches.

See the screenshot attached.