Here is a little info about the oddball spindle taper. A #3 MT will fit but it sticks out too far...Bob
An interesting point concerns the spindle nose: this uses what appears to be a short No. 5 Morse taper but is actually specified as a proprietary fitting with the same taper rate as a No. 3 Morse (0.602" per foot) but with a "gauge line" of 1.629" diameter. The "proper" No. 5 taper has a rate of 0.6315" per foot, and a gauge line of 1.748" diameter. Although calculations show that a standard (but shortened) No. 5 Morse taper 2.5-inches long would be approximately 0.006" loose at the smaller-diameter end in practice a No. 5 Morse does appear fit - though there is always the chance that your lathe may be different. The correct sleeve, to South Bend's specification, can be obtained from Scot Logan at lathe.com