Here's an idea for a DIY LED tail light...
+ Take one red/orange Luxeon III LED mounted on a star PCB.
+ Mount it directly onto your bike's rear metal fender in an appropriate location using thermal adhesive (Arctic Alumina or similar), and wire it up as needed. The metal fender acts as both a mount and a heat sink for the LED.
+ Mount one L2 flare optic directly over the Luxeon LED, sealing it around the edges with clear silicone. These flare optics have a 10° X 80° oval beam pattern, so they should provide good visibility from the rear of the bike, as well as a bit to either side as well.
+ Wire it into a DIY LED headlamp built using this schematic.