Well, this is what my first rev turned out like. It is a little rough, but the concept works great.
Closeup of the tool holder when it is retracted into the spindle taper. I still have to ream the 1/8" hole to size and drill/tap a set screw hole, but it looks promising.
Here you can see the tool holder in the partially retracted position right before the grippers close down on the ball at the back end of the tool holder.
This tool holder was incredibly difficult to make. I have no idea how you machine two tapers so that they match up exactly. I ended up taking at least 20 cuts at various angles trying to get the tapers to match up. Made lots of chips though...
Here you can see how the gripper works. the drawbar is threaded into the gripper body and the gripper flexes just enough to cinch down on the ball at the back of the tool holder. You can kind of make out the cutout on the inside of the gripper body if you look through the slit. This required a custom grind on one of my tool bits so I could cut the internal profile.
The three deceptively simple parts to make. I'm sure a machinist would have no problem making these, but for me, it was like trying to ride a bike for the first time.
Gripper body. I did get to use my new slitting saw to cut the slit in the body. It worked great and left a much better finish the the trusty old hack-saw.
Here we see how the gripper closes down when retracted into the shaft. Simple, but it works great.
The complete assembly with the tool holder in the retracted position.