John,
I went through a series of boxes and pulled out some parts one of them a Nautilus s-handle and an old broken Compass, Followed your idea and applied this idea of yours to see how the setup would feel.
And you're right about the Compass box mounting onto the Nautilus S-handle, It'll work. Plus, The Compass lower shaft easily slides into the S-handle. It feels a bit lighter and balanced than the Nautilus setup, A bit top heavy but appears to be usable for long periods.
This quickly arm rest is not something I would use for this type of setup, I think an arm-rest with a Velcro strap would be better helping keep the arm secure relieving the minor top heavy feel.....As you mentioned you can always easily put it back to stock in case you need to sell.
Great idea!
Paul