I can make an ugly donut with my LED drop-in two different ways. If I start with a wide flood beam and tighten down, I will go through the ugly donut stage on the way to correct focus. If I continue to tighten after achieving good focus, I get another slightly less ugly donut. I assume you have tried the full range of focusing options and determined that you can never achieve a tight focus.
It is possible that the focusing capabilities of your Mag are slightly off. Just because it works with a bulb, doesn't mean it would work with an LED (different geometry of how the light is produced between bulbs and LEDs). The only way to figure out if it is the LED or the Mag is to get your hands on another Mag. If the LED works in the other Mag, then the problem is the flashlight. If the problem follows the LED, it is the LED (either a unit defect or just the way the Mag LEDs work. However, I think that someone else would have chimed in if this was just the way the Mag LEDs were designed to work).
Sorry I can't be of further help on this.
optodoofus