The only reliable way to get snug is to use metric or even then possibly underdrilling and filing out while checking the fit.
1/8" should be too large to be snug. 3/32 is too small. It might be easier to put a dab of hot glue on t han trying to get a snug fit if you don't want to do all the filing or don't have a tiny needle file or appropriate dremel tool attachment.
I find that a 3/32" bit works perfectly if you ream out the hole just a little with the bit after you've finished drilling through. I then apply some pressure to the LED to force it into the hole a bit and it stays put without any glue at all. The end result looks pretty nice and you can get an LED into a really small space without having to use a bezel or glue.
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