WhenTurtlesFly writes:

'Cause I have one- Filed to cruise at 8500. Two GPS's (old simple one
in the plane and my new portable) say I'm at 8500, but pressure
altimeter says I'm at 8000. I of course set my altimeter to departing
airport elevation, which should calibrate it to current pressure and
nonstandard temperature, right? Do I...

* fly what seems to be accurate and correct readouts on both of my
GPS's? Then risk my altimeter being off and my Mode C reporting
incorrectly...

No. The altimeter is more accurate than the GPS units. The fact that the two
GPS units agree simply means that they are both subject to the same error when
operating in the same place at the same time.

* fly GPS's and adjust altimeter to read the GPS altitude, even though
the altimeter setting is not what is reported?

No. The altimeter is more accurate than the GPS units.

* fly the altimeter set at reported conditions, have my Mode C report
accurately, but run the risk of being off VFR altitude?

Yes. Fly the altimeter. The risk of being 500 feet off is virtually nil if
you've set the altimeter correctly to begin with.

GPS provides very poor vertical accuracy compared to a barometric altimeter.
GPS is designed for lateral accuracy rather than vertical accuracy.