Post an image of how you have it setup and how you are measuring. Which journals have the highest runout? Does the 0.0035" indicate a bend in the cam, or incorrectly machined individual journals?
The reason I ask is in my world, runout typically indicates an incorrectly machined or worn journal that is no longer on center (concentric) with the axis of the cam. This is typically measured with the cam in a lathe or cam grinder that can hold the cam on center. However, I have seen the term used to indicate cam bend as well, this is typically measured with the end journals supported on a set of v-blocks and dial indicator used to measure the center journals while it is spun by hand, see image below.
Cam bend can be fixed with a press, or believe it or not, a hammer and chisel. Incorrectly machined or worn journals are a bit more difficult to repair.
Depending on the engine we are building (Large Diesels with a much longer camshaft than an FE), we do not allow more than 0.003" of bend or 0.003" of runout, so your cam would get pulled off line and sent to rework here.
