David- If you use a tube it should be extruded and not rolled. I would suggest a length of milled flat steel bar such as one gets from MSC. 1/4 x 2-inch standing vertically and the dial indicator on the edge. Its sag will be negligible.
1-2 thou wiggle may be too much. If it is additive you may mis-measure thickness by 4 thou. It may not matter if your barrels are 30 thou thick but if they're 21 thou thick then it is potentially serious.
The movable indicator is an Achilles heel to this design - It is very difficult to mount even a light dial indicator in such a way that it doesn't wobble or flex over the distances you are trying. At the very least you would probably need a precision bar and a semi-kinematic design in the block to maintain precision.
A length of extruded brass tube, obtainable from MSC or McMaster-Carr would be ideal for experimenting.
