I thread the hole in the botttom of the FSB with a tap, so I can use an allen head screw to hold the FSB in postion, once I get it set vertically.
To set the FSB vertically, I put the barrel in the upper and rotate it clockwise as far as it will go in the index slot (the same direction it will turn while being torqued).
I remove the front sight post, and thread a couple pieces of USGI cleaning rod segments into the threaded front sight hole.
Yes--a standard USGI metal cleaning rod is threaded to the same pitch as the front sight, so now you have a 16" tall wand standing vertically in the front sight base.
Level the upper receiver, and clamp it in place.
Tie a socket or wrench (for weight) to a 6' piece of white string, and hang that from the shop cieling. Drywall screws work good.
Loosen the allen head bolt under the front sight base, and adjust the FSB until the cleaning rod sections coincide with the perfectly vertical 6' string--and tighten the allen head snug.
Make an index mark on the barrel and the front sight base, to mark alignment.
After you drill your first hole, check your alignment mark. If it looks good--put a spare drill bit into the hole that you drilled, and drill the next hole.
Check your alignment marks.
Put the barrel back in the level receiver and make sure that everything still looks good.
Check your allen head for tightness, keep 1 drill bit in place in the drilled hole while reaming the other.
Should work out just fine for you.