The spindle in the engraver had about 1/8" of axial play. Here's a short post on the teardown and how it was fixed.
This picture shows the components:
The problem was the outer race of the bearings was not held in place by the retaining spacer and lock washer. It bottomed out before tightening against the outer race of the bearing.
To fix it simply tighten the lock nut that holds the shaft. There should be a wavy spacer to ensure it does not back off.
Hope it helps someone!