January 14, 2008 10:46 PM
While a bit more pricey than standard twist drills, two flute drilling end mills might work for getting a flat-bottomed divot in an LED. They can be found in fairly small sizes. Check McMaster-Carr, possibly Grainger, or your local machine shop supply (Inland Empire, CA visit Ken's Tools in Riverside), or any online retailer of mini mills and lathes (like Sherline).
Any glue with a similar refraction to the led casing should work well. Super glue should be okay, but might end up a little too opaque. Some kinds of epoxies should work okay too, go for the ones that don't yellow when they dry. A glue that dries fairly clear should also be able to effectively remove any imperfections in the bottom of the drilled hole, as long as the hole is well cleaned. The right glue might even take care of the pointed divot of a standard twist drill (probably, in fact).
I don't know what the availability might be anymore (probably poor), but one of the old Lego Mindstorm expansion packs had 8 fiber optic bits in it. I know I have mine in the closet still, in the "can't throw this away but I don't know why" collection :) I'm guessing ebay could be a source. If anyone needs to know I can try to find the manual and provide the proper name for the expansion pack.
Watch out, don't step in the anthropomorphization.