Doing the grads is the easy part. You can do as Geno has said with a lathe bit turned side ways in the lathe. But that does bring up another issue you will run into. Most guys dont have a way of doing the indexing of the grads on a lathe. I have several ways I do indexing on my lathe, but for most, they dont have the set up. The number of grads will also make the differance if you could use a automotive degree wheel as Geno mentions. The how much accuracy do you require?
Being you mentioned your vert mill is being restored, I don,t know if your mill is still together enough to use th quill to do the grads. Ive usually just mount the work piece in the 4 jaw, mounted on the rotary table, and use the quill as a hand shaper to do the grads. The cutting tool can be as simple as a old starter drill, ground to a point. The horz mill may not be much use to you doing this job. The vert mill would be your best choice with a R/T or dividing head.
Sounds like you have most of the equipment to do the job. The numbers could be engraved as mentioned allready. Or you can go the stamped method. I have been using the boring bar holder to hold the stamps with the work piece in the chuck, and stampin that way. But if you dont want to use stamps, the engrave, or label it.
