Do some research on "Geoff O'loughlin rose engine" and "Jack Chick's rose engine" in my opinion these designs are easier to convert to pens and smaller turnings. You will need a source for the rosettes if you don't make your own. Making your own is a royal pain, and I mean a big royal pain.
Don't skimp trying to use a Dremel as your cutter, in my opinion it is a poor choice, there is too much give in the bearings. Go with a trim router or Foredom with a hand piece, you will get better cuts. You must not have any play/run out in the cutting system, every little bit gets multiplied. I tried a Dremel with a shaft, same one that I use on the Pen Wizard, worked fen on the Wizard, a disaster on the O'laughlin version. I thought I had other problems, I almost went crazy finding the problem, it was solved with a Bosch trim router.
Curious why you say his design is easy to convert for pens. There is no tail stock.
Adding the tailstock will be easy, all the tailstock does is support the end of the pen mandrel. Most of the rose engines and ornamental lathes have no tailstock. The exceptions are the homemade versions that are designed specifically for pen parts, such as Skiprat's version.
Look at O'Laughlin and Chick's versions, by using a 1-8tpi shaft or a shaft like your current headstock threads so you can use your chucks. A PSI collet chuck with an expanding arbor for your OT lathe headstock and you really don't need a tailstock if you take light cuts.
Before you go very far on playing with this research and READ everything you can find about OT and RE lathes. There is a plenty of info out there, you have to find it and absorb it. To save yourself a lot of headaches, take notes and do your homework before you start building.
If you have access to a machine shop, you can make it out of aluminum, if not make it out of a good hardwood or plywood, like Geoff and Jack did theirs. Nothing is high speed except the cutting, everything rocks and turns slowly so you don't need to mess with bearings. If you get concerned about the bearing issue, drill a hole and drip soak the wood with synthetic motor oil where the metal shafts rotate.
