There were 1 1/8 oz loads available in the old pre-WWII short American shells, although they were 2 9/16" rather than 2 1/2".

Whatever you come up with, I'd suggest having it pressure tested by someone like Tom Armbrust. You might also check out 16ga.com and see if anyone there has any suggestions. There is also a 16ga reloaders group you might consider joining.