Ok, I hope this helps out some of the new guys. This is buy far not the best method, but works well for me, and is fairly cost effective for someone who is trying to do things on the cheap. There's other ways to do the same things I accomplish with the tools I use, it just takes a little initiative and ingenuity to come up with something that works well for the tools that you have. I just hope that this answers a few questions and gives you some ideas.
To start, I use an old craftsman drill press with a 3" throw on the spindle. The bit I use for drilling wood is a long bit from Harbour freight that I had my brother in law cut down to 8.5" and machine down to fit a 1/2" drill chuck. The vice is a used cross slide vice from Harbour frieght. I love that I can get the bit centered up no matter how big the block. Your drill press needs have the spindle plumb, and the vice jaws square to the spindle. This takes a little time to set up, but once it's done you won't need to do it again.
Draw an x on the material from corner to corner to find the center.
Clamp the block into the vice and line up the center of the x with the tip of the bit. I use a small level to make sure the block is plumb to the spindle, and this will keep my hole from comming out skewed one way or another.
Drill through the block slowly, no race here. Make sure to clear the chips and go slow enough to make sure that the bit doesn't burn the wood.
Here's a picture of my 5/8" pinlock mandrel. I have it chucked in a collet chuck, but I also had the end machined for a #1MT so I can use it in either of my lathes without the collet chuck. Marvin (Dogcatcher) makes basic mandrels like this without the MT on the end for around $30 last I checked, but the first one I made, I used a 8" piece of 5/8" delrin and filed a flat on it .100" deep. I center drilled both ends, and ran it between centers, not the best set up, but it worked. This setup with the collet chuck is a great way to do this, and I highly recommend it. The collet chuck I bought was from PSI, and about $80, making it one of the best, and cheapest tools I bought for my lathe.
Here's a picture of the blank ready to turn down.
Feel free to PM me with any questions.
Bob