Struggling with wooden Inlays

I don’t have bitsetter, but maybe review this thread and see if you are using bitsetter correctly:

To me the pertinent question is after the machine probes bitsetter, is the z-axis zero still correct. Since it was working before and now it isn’t and you recently got bit-setter, it seems that is the most likely culprit. I think I saw in another thread that they always press change bit before zeroing to prevent errors. Otherwise I am stumped.