What size dremel burr should I use for diaphragm pellet 'removal' . The 3/32 looked too big, so I bought the 1/16. I have used the 1/16 on a couple of repair since and it seems to small--it kicks around inside pellet cup. Any advice would be appreciated

The 1/16" bur* is the right size. The key to using it is that you have to be able to stabilize the Dremel and the filler pump unit so that they can't vibrate or chatter relative to each other. Bring the bur into contact with the pellet very slowly so that you can control the chatter. Daniel Kirchheimer has made a tool to control the alignment so that you can't do damage, but it's a professional tool (translation: "very expensive") and isn't really suitable for the casual pen fixer.

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* "Bur" is the preferred spelling in the trades where these tools are used; "burr" is an alternative that is shown in most dictionaries.