@Nobby_UK,
that's a very practical way of fitting the drive into a 500. I did the same with a 600, it is set back a little due to the top section being made that way. I also had to remove a little piece of the emulator (bottom left as viewed from the front) because of the locking tab on the case. I also removed some plastic from under the base of the emulator where the USB port is but that was not necessary because the emulator couldn't fit that far forward in the case due to the restrictions of the case shape. I also had to use a hot knife to remove some of the thickness of the top lid wall to allow the drive to fit.
Basically my effort looks similar to your own mod, the hole in the top casing looks much the same as mine. I was toying with the idea of putting some sellotape on the front of the emulator and then possibly using some coloured silicone sealant to fill the gap that is left in the case. As it isn't really on show, I haven't done that though. The sellotape or cling film idea was to stop the silicon from sticking to the actual emulator and could be removed when the silicon has cured.
The 600 I used is a very yellow one, I wasn't too concerned about the end results but the practical side of fitting the drive overcomes any problems of altering the case lid.