Would one of the less expensive square hole bits work? There are two kinds, one is a geometric figure with one less side than the hole wanted: three sided rounded triangle drills square hole.
The other is the woodwoorking item, an auger down the middle of a square hole shaving bit. 1/8 is very small for this. And you have to have the bit holder for your drill press model. I have one in 5/16.
The square broach, if you wish to spend the money, will produce good results. You may be able to press it with a drill press, but ideally an arbor press will provide more control.
Have you considered turning the end of a 1/8 square rod and pressing it into an undersized hole? Do you need a lot of torque resistance? You might spline the end of the rod on a lathe by moving the carriage by hand as a planer would move. Or is it a shaper? It's a shaper. I was wrong. Why don't I go back and edit that? Maybe I will. Ok, I'll just.....
Yours,
Doug Goncz, Replikon Research, Seven Corners, VA Unequal distribution of apoptotic factors regulates embryonic neuronal stem cell proliferation