Laurette,
It's been a while since I played this but, as I recall, when you have both drill bits you can look at them in inventory and see the difference in size. I think the small bit was the one on the machine when you first went into the workshop. When I drilled a hole, I used the small bit first so I didn't drill a large hole when I needed a small one. The game should tell you if the hole is the wrong size.
Gil.
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My scythe... I like to keep it close to where my heart used to be.