NavList:

I was less than clear in describing the telescope alignment.

The long axis of the telescope should be parallel to the plane formed by the arc.  This is telescope collimation.  Should it be non correctable, it is termed collimation error. Some sextants permit this adjustment, others do not.  I am not familiar with your sextant and therefore cannot tell you if your sextant has this feature.  Certainly, holding your binocular as a monocular in sequence with your sextant will put that collimation entirely into your wrist!

The yaw of the long axis of the sextant (rotation perpendicular to the arc) is built into the telescope mount, with the residual error accounted for in your index error.  That is, you adjust the yaw by rotating the index mirror.  Again, with a floating monocular, you are limited by your muscular control.

The long axis of the telescope, once parallel, can also be adjusted up or down relative to the arc of the sextant.  This is termed "rising telescope" and adjusts, I believe, the intensity the images when using a split horizon mirror.  I like to think of it as more of one image, less of the other image when adjusting the telescope up and down.  Of course, a handheld monocular - binocular will be tricky to adjust when all the other adjustments are required as well.

Side error can also be present, where the horizon mirror is not perpendicular to the arc of the sextant.

I highly recommend Commander Bauer's excellent Sextant Handbook for determining and eliminating these errors. 

As, I am sure, will others.

Brad