Geckos, Servos, VFD and twitching on Z axis

Hiya,

We have an old Hurco knee mill that we have stripped and retro-ed
with a pc, CNCPro, Geckos and a Baldor VFD for the spindle motor. We
just got it all up and running but have a problem with the Z axis
servo or controller. Using a travel indicator on the Z axis, the
movement is smooth and exact. We have the machine running a program
that move Z -.100" pauses for 1 second and then moves Z +.100" and
then runs in a loop. When we turn on the VFD and the spindle, the Z
axis seems noisy and the travel on the indicator will start to
drift .001" to .005" each time the program cycles. The drift is
random, sometimes positive and sometimes negative but positive the
majority of the time. When we slowed the motion to 1 ipm, you can
see the motion twitch at random during the movement. This only
happens when the spindle is running and only the on the Z axis. We
swapped out the servo motors with the Y axis and the problem stayed
with the Z axis controller. On the machine, the Z axis servo is
mounted on the front of the spindle head of the machine, the motor
(5hp, 230V, 3ph,) is on the back of the head. The VFD (a new Baldor)
is mounted on the side of the head about 6in from the Z servo. We
also dismounted the Z servo and located it away from the motor and
VFD to test for magnetic flux or noise and it still twitches. We
have also played with the gain and damping adjustment but nothing
there would correct the problem. The twitching is only in Z, all 3
Geckos are getting their power from the same DC power source which
baffles us why the twitching is only on the Z axis. We are also
using new US Digital encoders. When we swapped servos though, we
also swapped encoders and the twitching stays on the Z axis. We also
rerouted cables as far from our VFD and motor as possible but still
have the problem.

Any suggestions or input will be greatly appreciated, thanks.