You need to connect the inclined manometer inline like you did before with the vertical, without moving it from the inclined position. Draw 12" on the vertical and you should see 12" on the inclined manometer since that is the height of your scale. Do the same for 10", 8", 6" etc . . . this will prove the inclined is following along correctly. You can then connect it back up the way it should be and do your testing.
Hope I got that all straight its been a long time since I messed with water gages!