Yes, I understand (and support) that there are a number of good reasons for using teflon coated wire but so far nobody's hit on the two that caused it's development however, heat resistance (high temperature use) and abrasion resistance.
In the case in point, shrinkback (a large variable IME) can also be a feature. You should know the general length involved and already be stripping short by that amount. You can undercut the lip of the hole with the tip of your exacto knife, sort of score a ring in the side walls first even to give the insulation something to grip as it *swells up* when you tin in place. Otherwise, tinning before and cutting to size afterwards usually controls the insulation well enough. After the initial shrink back, it doesn't move all that much more with repeated reheats.
Worked at professionally with the proper tools teflon works fine in airplane harnesses, it can work well. In general instrument use, not so carefully controlled and inspected, the results are less good. Al is right about the general dependability of the wire, you work long enough in this industry and keep your eyes open and you see way too high a failure *rate* with teflon wire. The common failure is a break at the strip line from a tool induced nick. It's almost sure to get a strand or two (cut open well used connections some time, like connectors with cut and stripped wires and poor strain relief). With teflon, for some reason, it seems to often proceed to failure. That is, you notice that 'way too many of these failures I've seen are teflon wire'.
Al's also right about using teflon *tube* and buss wire. In the case in point, it would have solved the issue very well most likely. This way you control both the teflon insulation and the conductor with no stripping involved. No nicks. As long as we're talking out of class, here's how:
First, *stretch* your wire. Clamp one end of a few foot (up to 6) long piece in your bench vice (or otherwise secure it). Grab the far end with pliers, pull it tight, then slowly pull just a bit more until you feel it yield and stretch an inch or so. Slowly relax and catch the wire as it starts to sag with your other hand. Cut it into shorter lengths (say 8 or 10 inches) and you have perfectly straight wire to work with. The trick to having enough hands is to use your cutters as the pliers to stretch it with (they're "side cutting pliers" after all....), clamp down a bit, roll the wire around the head of the cutters and hold it in place with your thumb. Then pull the cutter head straight back with your other hand without clamping down any harder on the cutter handles. Now you've got the cutters in your hand, ready to go. Keep some tension on the wire, move your free hand to a few inches from the cutters, hold the wire, cut the first inch off and discard. Now cut the wire off from the vice, say 3 feet worth. Holding tension, make the cut and let the cut end swing down so you end up holding it vertically at the top, the vice end will sag down to toward the floor without much damage. Hold the vertical wire over the workbench an inch or two, cut off say 8 inches, lower it, cut again and so on. The do the same for the piece still in the vice (cut it off an inch or so from the vice jaws and let it hang).
Now slip a piece of tube over the wire that's longer than you need. Working from one end, dress and terminate the wire then slip the tube to the proper position. Dress the remainder of the run. Go to where you're going to end the tube and grab it with your cutters but *do not* cut it, just grab it. Now slide the tube (with the cutters still gripping it) up the wire to where the end of the wire will be and cut *both* tube and wire together. Slide the tube back down the wire to the proper place and everything's perfect length and there's no chances of a nick anywhere. You can then take the cut off wire and tube, slide the tube down a bit and go on to the next connection.
FWIW, in the case in point (having to bring a lead up *iniside* a tight post), I'd have tried to find another solution that didn't involve drilling into the heat path. Maybe a strip of copper foil tape up the side of the post (insulated with mylar tape under it)?
Doug Owen