Yep you're right - I had nuts come with the new bolts I received so just assumed thats what they were on the diagram but they're definitely washers.
I've just gone through a variety of Headlamp Casing diagrams on Hitchcocks from the 500 Bullets (1989 - 2001), 08-12, Electra X (2005 - 2008)
, 500cc Electra EFI (E5 & G5) and the newer classics and they all appear to just be screw in from the top in to the casquette...
That doesn't help with the mystery of why the holes are to small though, as a couple have mentioned, if the threads have been drilled they would be bigger
I feel I may need to spend a day taking the casquette off and seeing whats going on/ happend.