thats how I do a lot of mine. the trick is turn the blank so it barely fits through that way it wont want to flop around assuming the inside or the spindel runs true.
In other news, yesterday I found an interesting trick in Vickery's gunsmithing book. Basically, if you're working with a barrel blank and it won't go through the headstock for threading and chambering, just turn the OD down until it will, allowing for the profile you'll put on it later. I like that idea a *lot* better than dinking around with the steady rest.