Hi Sean,
Isn't stem bell research basically banned by the federal gov't?
Apart from that, though, I would think that the safest place to do it would be dead center between the quill and clamp, as that is where the stresses are lowest. Vertical (on top) would be better than horizontal, since side forces are lesser (intuition speaking here) than top forces. I've got a couple of old GB stems that were drilled through (top to bottom) to create a cable stop for center-pull brakes.
Dave (not an engineer, but some of my best friends are) Ross Portola Valley, California USA