Problem Leadscrew backlash measurements not accurate with compensation on

I have noticed that when I use my dial indicator and check the backlash on my lathe with BC comp. off on the Z axis I am reading about .0038" backlash. If I account for this in controller and turn BC comp on and check Z moves it is too much. A .001" Step will overshoot by almost another .001". By just reducing the backlash compensation and checking in a go no go kind of way with BC compensation ON, the dial indicator is moving z+ to z- and z- to z+ accurately set at .0026". Just wondering if this is a stepper pulse thing? This axis every so often will be off when homing by .003" but it is super accurate 90% of the time.
Any info is appreciated,
Mike