Funny you should mention that Dan. I also used to have a HF 8x14 & I also had the Lathemaster AXA set with their modified tool holders. But for me, even with their shorter AXA tool holders, I still was not able to reach centerline with 1/2" tools. I ended up buying more AXA holders & took them all to the engine machine shop I use to have them all milled down to what I needed. I even had the parting Blade holder milled too.
I did some checking this morning, and I think I might know why.
The Glanze set I purchased back in 2008 measures as 12mm not 1/2". The set I got in December is a true 1/2". I looked them up and the url says 12mm and the page says 1/2" but the part numbers are the same.
http://grizzly.com/products/Glanze-Turning-Tool-Set-12mm/H5681
After a quick freak out (I hadn't used the new set yet) I check and the new set works, but just barely.
Old set sitting on the compound.
New set sitting on the compound.
I checked the base of my holders and the old ones I purchased back in 2006 and the new ones I got in December all have a bottom thickness between 0.307" & 0.312". The only exception are 3 new ones that are 0.323" but they are obviously made by a different manufacture as their fit and finish is much better.
What year did you get your lathe? Mine's a 2004, and I wonder if maybe the casting are slightly different, and thus a contributing factor.
On the Topic of inserts, I would advise that people only buy good name brand inserts. If you watch eBay, you can find good name brand inserts for 20-30% of what they retail for. I've used both, and there is no comparison between cheap inserts and good name brand inserts.