1 x round bar stock that can be machined = no springy quality - abt 15 cm long
What diameter? i guess bigger then 8mm (bolt size).
1 x pin that can will be used to insert in to bar stock for the gauge plunger to read.
What kind of pin? 
Can a metal rod of 1mm dia or something like that will work???
What Length??
find an injection pump high pressure head center plug bolt - its 8x1.25 thread
I think this: http://cdn.instructables.com/F1Q/XB18/H1JUGLMQ/F1QXB18H1JUGLMQ.MEDIUM.jpg
and this: http://www.convertiblewindscreen.co.uk/images/azzinjectorpumprotortimingplugthumb.jpg
mill the bar stock to have this thread at one end,
You mean,,
create threads inside the bar stock so that Head Bolt can be fastened?? (threads of bolt goes inside the bar stock)
OR
Some how fix the Head of Head bolt in Bar Stock, while Thread side faces outside.
now drill a hole in said bar stock through the centre and make sure your pin can also slide neatly with some oil applied
by CENTRE you mean along the length of barstock, right??
Should it pass through Head Bolt as well??
I am confused about this step.
pin should not slop side to side.
You mean pin should have no play other then linear motion, right??
now mill bar stock on other end to make a receptacle for the dial gauge tail - drill a hole 90 degrees to the milling and use a thumb screw to lock the dial gauge into the tool.
I think this is the required Dial Gauge Micrometer: http://cdn2.bigcommerce.com/server1500/6c8df/products/222/images/200/1400_Dial_Indicator_Depth_Micrometer__40646.1405391852.1020.660.jpg?c=2
I don't get what meant by 90 degree, and fixing, please elaborate more.
Whats the purpose of Headbolt here??
I guess, we remove pump HeadBolt, attach our gauge using headbolt, which has a linear pin that touces some plunger inside the pump, and transfer the linear motion to Micrometer.
Probably the purpose of barstock is to remove play in the linear motion pin.
Please elaborate.
Thank you, and best regards.