Some further thoughts/ observations:
If the collimator were acceptable seated on the LED, a silver paint applied to the exterior of the collimator surface would perhaps be sufficient in redirecting the side spill light out the front of the lens. As soon as you lift the collimator off the LED, a paint would close the door to this light.
Someone with a HD or 5W should take a hole punch and punch out a 1/4" dot of write right or LSD film and try placing that on top of the LED head and then dropping down the collimator completely over the LED. The difussion here may soften the focus enough for the collimator to work "as advertised" You may loose up to 20% efficiency here but if all the light makes it out the end, you may still be ahead of the game.
In another thread, I believe, someone mentioned using a material with a higher refractive index to keep the light in the collimator. That may help but a higher refractive index reduces the critical angle and it may be that some light will no longer be able to "get into" the lens. Obviously a polished reflector with the correct geometry should send out more light through the front but most of us wouldn't know what the geometry should be or how to get it if we did.
As the big players in illumination start bring Luxeon lights to market, I am sure we will learn of some efficient solutions; although non-spot light beams will likely be the most prevalent and we already know how to get decent flood beams.
There is agreat offer from a fellow CPF'r on another thread for making acrylic lenses but we need to figure out what the lens should look like.
Perhaps someone, again with a HD or 5W, can even try a ball with a diffusing film between it and the LED.
Whether a reflector or lens is used, If you go for a tight, sharp focus, you will get the "grill" pattern without fuzzing the light at the source. Many incandescent bulbs are frosted for this same reason. SureFires dimpled reflectors accomplish the same task, IMHO.
- Don