Don,
I also tried out the concept with NX-05 with an ARC AAA as the light source. The beam was indeed full of artifacts. However I am proposing putting 3 smaller Nichias (3mm) around the LS at the right angle (both vertically and horizontally), which may reduce the artifacts so as to make the beam useful in close range. Combined with HD LS, low profile Fraen optics and a variant of the intelligent Kroll Nukiez is working on, the arrangement may be able to create a small (1x123 ARC LS-sized) flashlight with both longer-range throw and short-range spread.