Ward I am beginning to hate you
I just spent three hours coming up with a solution and you do it on the fly, oh well I guess that is what comes from experience.
I did it this way, and if machining would it create problems?
Create cube
create 2" cylinder
Use Difference on the cube and 2" cylinder
re-create 2" cylinder
create the 1" cylinder
Use Difference on the 2" and 1" to get hole through.
Your use of watertight makes me think I might have a problem as the way I am doing it is not really a one piece as yours seems to be indicating. (am I wrong here)
Thanks
Ken