http://sherline.com/Wordpress/wp-con...1/3049inst.pdf
This will likely fit but the largest bore is a little too small for the bearing.
You'll have to work out how to get it in the R8 taper <- I keep forgetting I made an shank holder for this.
Could ream that 25mm hole out.
LittleMachineShop carries this boring head:
http://littlemachineshop.com/product...ProductID=3662
Criterion is known for making inexpensive small boring heads:
http://www.ebay.com/itm/Criterion-Ad...AOSwaZdXIXu K
You could use a rotary table if you can rotate the entire piece within the confines of the system.
This is much less a problem on a CNC retrofit.
If a Sherline under CNC control can manage this - that machine from Little Machine Shop is rigid enough to do it in aluminum.
https://www.youtube.com/watch?v=rmuDwlAenfU
I don't have video but I've been able to pocket a hole on my MaxNC 10 CNC mill within a thousandth of the intended center repeatedly. This machine is aluminum so the key is to take light passes and low cutting travel speed.