those types of drill lanterns make excellent hosts for lux mods.. to deal with the plastic problem you need to vent the heat.. if you don't go overboard.. i.e. 5W or less.. you can easily get enough convection if you just have a heatsink with vertical fins and drill holes top and bottom in the head of the light.
My favored approach is to use a small (2" square 1/4 thick) heatsink with a fan (avail. at radio shack for $12 or so)... and mount 3 stars on it... you can run them full power (1A) no problem.. using a buck driver like the 'buck puck' from led dynamics... I use the buck puck because it has a control pin and i can make a low-voltage cutout that will shut it off before wrecking the batteries.
Other possibilities are nFlex (but i think it might have 16V maxiumum)... and no low-volt cutout.. so the best i know of is the buck-puck..
http://mega.rouse.com shows the similar light i built for myself.
http://ldo.rouse.com shows the low volt cutout i built to go with with parts from RS.
-awr