If you use the right tool to scribe the tire, the spray paint method should be very accurate indeed. Traditional alignment shops, before the electronic era, did the same thing, except with chalk, and a spring-loaded scriber that insures that the line is very straight. I would not trust measurements from the sidewall of the tire, because sidewalls can be a little irregular. IN addition, it's always hard to get a really precise inside measurement unless you have a rigid stick made up to take inside measurements. A tape measure is a poor tool for this.
It's important, if there's any camber on the wheel, to make sure that the measuring is done at the same height off the ground both front and rear, as well as being level. I use a stick with feet that rest on the ground, that has a section of tape measure nailed to the top. Since the XJ specs call for zero toe-in, the actual height doesn't matter as long as it's consistent.