There is another style of O ring available that might work, no one has mentioned it, so it might be new territory. It is called an "X" ring. The cross section is an "X";), might be worth exploring.
It is amazing how much was thought of this Man's sacrifice that they made a coin for His posterity. It is also amazing how little is made of the today's People's ultimate sacrifice.
With a less than rigid setup the carbide end mill may chip. It might be better to get experience with cheaper tools. Are You climb milling or conventional milling? Climb milling sometimes makes a sketchy setup worse.
Gee I have been using ordinary black cutting oil for tapping for 30 some years, glad to find out it isn't working. Try a different tap as suggested, maybe different material if necessary.