HSM Express+Tormach undersized holes

[billbo911]

Hello CAD specialists and machinists. To start off, I am neither.

Here is what we are trying to do, what we are using, and the results we are getting.
Inventor Pro 2016 STUDENT ADDITION, Inventor HSM EXPRESS, Tormach PCNC (770). We are doing some simple testing to make sure we understand the basics of using this system.

A simple part is built in Inventor that includes a .06125 deep oval pocket. A couple inches away from it is a 1.125 inch diameter through hole, for mounting a bearing. We are using scrap pieces of 1"X2" .125" wall 6061 aluminum tube as our test material. We are using a .5" dia., 2 flute, HSS end mill to do the work. We are running approx 1700 RMP, and .0011 IPT, so we are not stressing the system much at all.

The pocket turns out as expected. The problem is, the hole ends up being 1.085" in diameter. They are round and the walls are not tapered. (We saw similar results last year when doing similar work on our "Fireball" desktop CNC routers, but that is another story.)

What would account for the .040" undersized hole?

I know there will be many questions, but this is what I can think of for now.