As usual with the mini lathe, it's a compromise between space, and a desire for features.
Problem is that the scale is too big to be mounted along the side of the cross slide like that. Plus, my carriage lock is in the tailstock side of the "H" shape of the saddle, where the read head would go. I don't want to move the carriage lock back to the chuck-side, as that's a danger to my knuckles (and I don't want to have to stop the lathe every time I engage/disengage the lock). Additionally, If I mounted it like Stefan does, the fact that the scale will protrude above the cross slide will mean I can't use my compound.
I've got my current iGaging scale mounted off the far end of the cross slide, similar to yours, though I did it the opposite way, where the read head is stationary and the scale slides. The read head is mounted to a U-shaped aluminum bracket that's bolted to the far side saddle (opposite the operator), and the scale is attached to the slide. I'm thinking of a similar scheme for the glass scale... Just need to come up with some kind of rigid bracket.