It may help to use an upspiral bit, the slowest rotary speed you can use while still having the torque to swing the bit, slow feed rate and small depth of cut increments (most of these you have already tried I think). And, if you can do it without killing the dremel or electrocuting yourself a coolant like cool soapy water may help too. Not a huge amount of soap, just enough to slip things up a bit.
If you cut it to small you can always nail another piece on the end, but if you cut it to big... then what the hell you gonna do?
Steven