I've got a lathe and that's something I would not do. Why not buy a new cable that steps down to 1/8" instead? No fuss, no muss. In fact if you need a .150" cable that steps down from 3/16" to 1/8" I have a new Ed Hughey cable with welded stub and a pinned drive dog if interested.
Its not worth doing, I also have a lathe. The problem is whatever way you do it is holding the prop, its also very difficult for the hole to drill out accurate. I assume you referring to bronze props which are difficult to drill because as soon as the drill starts to cut the bronze snatches onto the drill so need holding pretty tight.
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