Jason, thanks for the reality check. These are some of the issues I would expect. I think the solution to "hanging chads" is in extraordinary precision in the centering and clearance between punch and die. I'd guess that the speed of the punch is also a factor, as might be use of a high vacuum below the die set.
Originally Posted by kb3lms
Re: round holes: I don't think these are at all desirable for film transport (in cameras, etc). But "round" makes it simpler for a home machine shop to make punch and die sets, and to have these precision-aligned (within reason). It wouldn't be necessary to have the rotational alignment near perfect, as it would be with rectangular punches.
I'm sure it can be done, I'm just saying the reality is a lot more difficult than it appears.