I'd try something like...
Make Object Cylinder 4,1
Dist#=Sqrt((Object Position X(1)-Object Position X(1006))^2+(Object Position Y(1)-Object Position Y(1006))^2+(Object Position Z(1)-Object Position Z(1006))^2)
Scale Object 4,Object Size(1006)*10,Object Size(1006)*10,Dist#*100
Position Object 4,(Object Position X(1)+Object Position X(1006))/2,(Object Position Y(1)+Object Position Y(1006))/2,(Object Position Z(1)+Object Position Z(1006))/2
Point Object 4,Object Position X(1),Object Position Y(1),Object Position Z(1)
...Make sure you cylinder object has a size of 1. You might need to use the "Fix Object Pivot" command to get the "Point Object" to work. Also, Make sure your distance formula is correct... Sqrt((X1-X2)^2+(Y1-Y2)^2+(Z1-Z2)^2)... Other than that I think your method would work fine...
Thou shalt not thwart the way of the dragon. For thou tasteth like chicken.