Thought I would post up and pass along some info that might help others. I am in the process of installing transom exhaust back on my boat and am going with a 4" stainless tip, the original tips were the 2 7/8" trumpet style tips so I had to cut the holes in the transom in order to fit the new stuff.
The easiest way I found was to purchase both a 3" hole saw, and a 4" hole saw. Put the 3" inside the 4" and remove the drill bit from the mounting piece. The holes in your transom are most likely 3" holes, and the 3" hole saw acts as a guide for the 4" hole saw, thus cutting a perfect hole.
Anyone have any tricks for getting the tip aligned perfectly vertical?