I've got a custom heat sink made from soldering pennies together, then filed on the edges for a snug fit into the RC-C3 body (pill was removed by unscrewing). The diameter is slightly larger than a 16340 cell, so it is probably not much bigger than 17mm. In terms of height, I have not yet decided to go with the stock reflector with the hole enlarged, or a aspheric lens pirated from another light. If I go with the aspheric, I should have ~10mm of head space for the driver. Using the stock Al reflector, I won't really have any room at all and will be going DD.
I might first try the DD approach, then depending on the result, do the driver mod that you described.
thanks for the help!
Hill