Erik,
I was going to buy the DG-2 as well. But after some advice from a CN member (and LB12 owner), he recommended the DG-1.
As you've found out, the DG-2 doesn't fit.
You can experiment with different packing materials, I was encouraged to use the cotton balls by one of our very experienced ATmer's in my club.
It won't rot or cause any other problems.
Even on the wettest nights, the cotton has stayed dry.
The only tools I used was a "Dremel" style mini drill.
Jaycar have them on special for $44, or see if you can borrow one.
The plugs and grommets were purchased from Supercheap, though most motor acc places should carry them ($6)
The reason I made my inspection hole bigger than necessary was just in case I had to remove the mirror, this would allow better access to be able to lever it out.
Since the heater was a little smaller than the DG-2, I would recommend that you increase the heater setting to allow for this.
How much you ask? Experimentation is the only way.
If you need further help, please ask.
Good luck