alloboard,
Actually, LEDs are much more directional than incandescent light bulbs when it comes to emitting light. (That's one of the reasons why they work so well as headlights on locomotives.) So, very little diffusion happens with LEDs.
Even so, black heat shrink works quite well for funneling any "stray" beams from an LED. It's relatively inexpensive, easy to cut, and comes in a variety of ODs. Your local electronic store (e.g. Radio Shack) or your local hardware store should carry it. Electronic vendors on the Internet (e.g. Mouser or Newark) are another source.
Tom
https://tstage9.wixsite.com/nyc-modeling
Time...It marches on...without ever turning around to see if anyone is even keeping in step.
They make these small o ring rubber objects that slide over LED's so light won't be diffused on all diections but insteat concentrated. Where can I buy these?