Ah auditing, what a profession.  I used to feel the same way as you.  I still do actually. 

Think of your organization from their point of view.  The auditor is trying to see if you meet certain requirements.  Are your gauges in good working condition?  Are your welders up to standards? Are your machines ok?

I had a recent pre-audit for TACOM and my customer wanted my weld gauges calibrated.  Many weld gages are simply stamped out pieces of sheet metal in odd shapes with measurement marks hashed on them.  I doubt any three could pass calibration to NIST requirements.  I asked our auditor how they did theirs.  He said that they made/used known values of blocks and compared them to the gages.  During the actual TACOM audit, the government representative didn't ask to see the calibration process. 

The same goes for calibrating my welding machines.  What can really change? It's part of the approval process.  My local welding supplier calibrated my machines for $85 each to NIST requirements. 

I try to have a documented (in writing) process for each item on the pre-audit checklist ready for the audit.  This gives the auditor an answer as to how I address each item.  He sees that I am addressing his concern and gives him the opportunity to suggest a "better" way of meeting his item. 

Think of an audit in terms of numbers.  The audit has 40 items on the pre-audit checklist.  The auditor has three hours to make observations.  He can't dig deep into all the items.  They usually focus on a few areas (what they know).  Also, many auditors know nothing about welding.  I have customers who haven't actually dug deep into each audit item on their list for five years.

Use a scale of one through five with five being the highest as to how strong you satisfy the audit item (how much money you spend).  One being "do nothing" and five being "buy something brand new, or outsource to an expert".  Answer each item on the audit with at least a two, most items answered with a three, and a few with a four.  

Don't fight the audit.  Have an answer for each item.  Give the auditors a few "finds" for his report.  Thank him for finding your "weakness."  The key is to show co-operation.  Show your customer that your willing to do "anything" that they suggest.  Hopefully, you'll get better paying customer as a result.   

I wouldn't have a problem with how you plan on addressing your auditors concern.  Develop a process.  Use check sheets.  Put the little calibration stickers on all measurement devices.  Have training classes for your employees.  Have a sign in sheet.  Put all documents into files.  Put them into folders.  Join ASQ, American Society for Quality for $100 a year.  Have a few issues of their quality journal in plain site.  Have fresh coffee and doughnuts!!! 

Good Luck,

Keith
      

Who was the auditor commissioned?
Get with your AI. Even if he isn't an ANI he can certainly refer you to such through the AIA.
When you have an AIA they can help with all kinds of matters.

NCA-3858.2 Control of Measuring and Test
Equipment
(a) Procedures shall be in effect to assure that tools,
gages, instruments, and other measuring and testing devices
used to verify compliance with the material specification
and this Section are calibrated and properly adjusted at
specific periods or use intervals to maintain accuracy within
necessary limits. Periodic checks on equipment may be
performed to determine that calibration is maintained.
(b) Calibration shall be against certified equipment having
known valid relationships and documented traceability
to nationally recognized standards, where such standards
exist. If no known nationally recognized standards exist,
the basis for calibration shall be documented.
(c) Control measures shall include provisions for measuring
and test equipment identification and for determining
calibration status by equipment marking or on records
traceable to the equipment.

The answer to your question is, no I don't think that will fly.
It is in my opinion, asking for trouble by not having an outside agency perform your calibrations.
Outside:
NCA-3126 Subcontracted Calibration Services
As an alternative to survey and audit of suppliers of
subcontracted services, a Certificate Holder or Material
Organization may accept accreditation by National Voluntary
Laboratory Accreditation Program (NVLAP), American
Association for Laboratory Accreditation (A2LA), or
other accrediting body recognized by NVLAP through the
International Laboratory Accreditation Cooperation
(ILAC) Mutual Recognition Arrangement (MRA), provided
the following requirements are met:
(a) The accreditation is to ANSI/ISO/IEC 17025:2005,
"General Requirements for the Competence of Testing and
Calibration Laboratories."
(b) The published scope of accreditation for the calibration
laboratory covers the needed measurement parameters,
ranges, and uncertainties.
(c) The Certificate Holder or Material Organization
shall specify through procurement documents that the calibration
certificate/report shall include identification of the
laboratory equipment/standards used and shall include
as-found and as-left data.
(d) The Certificate Holder or Material Organization
shall be responsible for reviewing objective evidence for
conformance to the procurement documents.
(e) This activity shall be documented in the Certificate
Holder's or Material Organization's Quality Program
Manual.

It must also be remember that the requirments of Section III have to jive with 10cfr50. One that is getting a lot of people in trouble is this one
10cfr50.55a
(v) Independence of inspection. Applicants
or licensees may not apply NCA-
4134.10(a) of Section III, 1995 Edition,
through the latest edition and addenda
incorporated by reference in paragraph
(b)(1) of this section.

There are a lot of would be auditors out there who are only looking at it from the pespective of ASME code, and forget that provisions of asme code are modified by the CFR's another example:

(3) As used in this section, references
to the OM Code refer to the ASME Code
for Operation and Maintenance of Nuclear
Power Plants, and include the 1995
Edition through the 2003 Addenda subject
to the following limitations and
modifications:
(i) Quality Assurance. When applying
editions and addenda of the OM Code,
the requirements of NQA-1, ''Quality
Assurance Requirements for Nuclear
Facilities,'' 1979 Addenda, are acceptable
as permitted by ISTA 1.4 of the
1995 Edition through 1997 Addenda or
ISTA-1500 of the 1998 Edition through
the latest edition and addenda incorporated
by reference in paragraph (b)(3)
of this section, provided the licensee
uses its 10 CFR Part 50, Appendix B,
quality assurance program in conjunction
with the OM Code requirements.
Commitments contained in the licensee's
quality assurance program description
that are more stringent than
those contained in NQA-1 govern OM
Code activities. If NQA-1 and the OM
Code do not address the commitments
contained in the licensee's Appendix B
quality assurance program description,
the commitments must be applied to
OM Code activities.

This is not getting into the specific regulatory guidelines either. That to has to be meshed with your QA program.
If i were in your shoes, based on what you've stated so far, I would be getting very disturbed that my mock survey auditor didn't addresses these matters.