I am going to commit extreme heracy and suggest a real modification. I added a bike cage to my daughters steel frame bike using an industrial product called Rivnuts. Think of a poprivit with an internal threaded core to take a screw.

http://www.cardinalcomponents.com/fasteners.htm

A decent fastener store carries them in a variety of sizes. You can make/buy a small adaptor that will enable you to set them using an ordinary pop rivit gun, or visit a local machine shop and pay them a few $$.

You probably would not want to do this on an alloy frame, but an older steel frame is unlikely to be damaged by a pair of 1/4" holes.