1st thing you should probably do is chuck the small HF tooling! I dont know what you did to get the tube to look like that but it looks like its tearing not cutting? I have an 8x12 and most of my tooling came from shars. They have a pretty good catalog
http://www.shars.com/ They also sell on ebay under a different name thats how I found them. 1/2" tooling is what I get.
Your also going to need to shim the bit up.
http://busybeetools.ca/cgi-bin/picture10?NTITEM=B1256 I have been eyeing these, quite a bit easier than my homemade shims.
http://www.fignoggle.com/machines/8x...o-shimBits.htm