Because you're dealing with a round surface and trying to engrave with a linear device, I can only think of one way in which to do it and that will require some trial and error to get it just right.
I'd go ahead and set up the printing that you want carved using a black text on white background, then save that as a .png. I'd then go into my photo editing software (Photoshop, Gimp, etc) and then use a linear gradient so that the middle is light and the top/bottom edges are darker. This would allow ipicture to somewhat follow the curve, you'd have to play a lot with the gradient to get it following the curve exactly.
My other concern would be as to what you're carving, even with the 1/50 bit the wording on a pen might be too small to be readable.
You are going to have problems as the wording will only be vertical and not curved to go around the pen unless you have a new machine like the stinger that has a lathe attachment, or a seprate lathe engraver to rotate the pen. I think Oliver was suppost to be coming out with one this fall.
Unless their plan changed, the "lathe" that Oliver was coming out with - as I understood it - would allow you to carve one side of the piece in a normal fashion, then rotate it 180 degrees and carve the back side. The wood is locked in place, and the carving motion remains the same linear setup. That wouldn't help any with carving pens. Maybe you're aware of something that I haven't heard of.
With a finished product like a round pen, you'd also have to come up with some way of locking the pen in position in a way that the bit would not hit the mounting.
The accessory that I was thinking of is shown in their 2012 catalog online, called a 4-axis manual attachment. However it says that it's only for the 1015 machine, doesn't mention using it with the 1013. A lathe carving machine is the 1010, but I'm not sure how this would work with carving letters into a round surface because that catalog doesn't go much into detail on anything - just general info.
I watched the youtube on the Stinger 1, it is an interesting option that would be on top the cost of the initial Stinger CNC machine. Since what I saw on their website puts the cost of the Stinger at three times that of the 1013 (~ $6400 not including the lathe), it is a pretty expensive way of engraving pens. Neat product though, though I would put it more into the "serious" category of users rather than the hobbiest the 1013 is designed for.
I agree that the laser would be the way to go for smaller lettering, but wouldn't it have the same problem with engraving on a round surface?
How'd hunting go this year? My nephew got a buck 11 minutes into the season with a crossbow, first time he'd ever gotten anything hunting deer and boars. Don't hunt myself, could never stay quiet long enough.
The fellow I know that has a laser is able to use it on flat and curved surfaces, he makes a lot of awards and trophies. I kind of wish I had one as he is doing very very well and actually has a physical store. He gets orders from all over the country.
Hunting, now there's a story, for the first time in years I only seen 2 actual deer and the ones I seen were on the run so no luck there. We had lots of them on trail cams before the season started, then nothing. They must have got a memo.