Is moving air less likely to condense?

not sure if it's relevant but you only seem to get dew on the grass after a still night

That's a really interesting point. Perhaps it's because still nights are ones where there is less mixing and the temperature at ground level can more easily fall below the dew point?
 
Forget the moving vs still air nonsense - it is really irrelevant in this situation. Unless you're prepared to construct a decent shed, with a damp proof membrane in the floor, vapour barriers on all the inside surfaces, breathable membrane on all the outside surfaces and some decent insulation, then you have only one option. As Boo said much earlier, a 40w tungsten filament lamp (or two, depending on the size of the lathe) along with a cover of some sort (maybe a couple of bed sheets, or something a bit more permanent made from mdc or hardboard) will keep the temperature of the lathe just above dew point and stop condensation forming. 40 W spent on heat will be much more effective than 40 W spent on stirring damp air.
 
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