Ok, here's how I set mine up. I also noticed when I just took it aprt, that my hole is just through two layers of plastic (inside and outside). It looks like the manufacturing process for these powerade coolers sorta welds the two parts together at this point and they just punch a hole through that for the spigot.
Anyway, I was a little inaccurate on my previous post on a few details...Everything is still 1/2" cpvc, but the angles are 45's and I only used one washer on the inside and outside. I had to dremel out the hole in both washers to get it to fit easily (they must have been 3/8"), and I bent the inside washer to fit the curve of the cooler.
Here's what it looks like put together (loosely)
Here's a shot of it taken apart.
Here's a close up of the brass nipple...notice the curve on the right washer?
The black rubber washer sits about in the middle of the smooth part of the nipple, and the stainless washer (right), is about all the way on the smooth part.
Here it is tightened down
My cooler wall is maybe twice as thick as the space left over, so everything cinches down nice and snug. This configuration works well for my cooler, but I don't have to deal with the walls collapsing any. You could used the OP configuration and just sub the cpvc in for the metal part. This might save some wear and tear on the plastic cooler walls, as the whole thing only weighs just shy of 273g (~10 oz.)