FLC OF AN LTT FAILED TO SET THEIR ALTIMETER TO THE CURRENT SETTING DURING DEP; RESULTING IN ATC INTERVENTION TO CORRECT THEIR INDICATED ALT.

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AFTER DEPARTING CVG; WE WERE CLRED TO 11000 FT. WHEN WE WERE TURNED OVER TO ZID; THE CAPT (PNF) CHKED IN WITH '10500 FT CLBING TO 11000 FT.' THE CTLR CLRED US TO 15000 FT; ASKED US TO SQUAWK IDENT AND STATE ALT LEAVING. THE CAPT RPTED LEAVING 11000 FT FOR 15000 FT. THE CTLR AGAIN ASKED US TO RPT THE ALT LEAVING. THE CAPT STATED 11500 FT FOR 15000 FT. THE CTLR SAID HE SHOWED US LEAVING 12500 FT. THE CAPT ASKED FOR THE CURRENT ALTIMETER; ATC RESPONDED 30.41. AT THAT POINT; THE CAPT RESPONDED THAT OUR ALTIMETER WAS INCORRECTLY SET AT 29.41. AFTER RESETTING THE ALTIMETER; THE FLT PROCEEDED NORMALLY. HOW THE SIT AROSE -- WE PICKED UP THE AIRPLANE AT THE GATE THAT AFTERNOON. THE ALTIMETER 100 FT NEEDLE INDICATED ABOUT 200 FT LOWER THAN FIELD ELEVATION (897 FT) CVG. I APPARENTLY SET ??.41 ON THE KOLLSMAN WINDOW AND READ 860 FT LOOKING AT THE NEEDLE. THAT'S WHAT I EXPECTED TO SEE; BUT I DIDN'T NOTE THE FIRST 2 DIGITS 29. VERSUS 30. CONTRIBUTING FACTORS: WE HAD FLOWN 24 HRS IN THE PREVIOUS 3 1/2 DAYS WITH 48 HRS OF DUTY TIME AND MINIMUM REQUIRED REST -- BUT NOT ENOUGH SLEEP. TO PREVENT: READ BACK ALL 4 DIGITS OF THE ALTIMETER SETTING AND VERIFY SETTING IN THE WINDOW.