With the proper written procedure you can UT less than 5/16". The procedure written by your Level III will include your acceptance/rejection criteria since D1.1 Table 6.2 limits you to 5/16" and up. Without a procedure you can still UT less than 5/16" but only for informational purposes. Also the resolution on the machine has alot to do with how well you can distinguish the intial bang from anything showing up in the first leg...my USN58L does this OK, just open the screen up to 3" or so and it seperates the signals pretty well.