Measuring piston protrusion, I've since found a slightly better setup that I will post when I get the final measurement.
Tools designed for the job holds the dial gauge perfectly vertical above the block and piston. Either the VW tool in an illustration above or a beam for the gauge with two precision legs. I made do with the tools I have:
Set the gauge to zero on the block.
View attachment 116432
Move the gauge over the piston and advance the crank until the gauge reads zero. Check the piston top is level with the block with your fingers, slight discrepancies are easy to feel.
View attachment 116433
Once you are satisfied zero on the piston is level with the block advance the crank so the piston reaches the top of its stroke. The dial looks the same but it has advanced by 1.03 mm. The protrusion of the piston can be seen.
View attachment 116434
1.03mm is bottom tolerance for a two hole head gasket. A two hole came off the engine but unfortunately the part number has gone.
View attachment 116435
This is just an interesting aside and I will do the job again more thoroughly with a much cleaner block. I've noticed something far more interesting: does anybody have the head off of a diesel? I'd like to compare a characteristic that I have spotted. Thank you.