Hey Dave,
with a g-code model that is exactly the workarea, you have to be sure your probed or manually set workpiece zero is really where it belongs. The smallest deviation will produce an error. Where is the workpiece zero in your 3D model, on left front corner? Or in the center like in the Onefinity video? I remember this thread the other day where exact workpiece zero positioning (probing or manually setting) was the problem.
Regarding bit diameter, CAM software takes bit diameter into account when producing a toolpath, but this is not necessary as there is enough reserve space around the workarea boundaries.