You’re running into the tiny faces issue.
You could avoid that with the native Trim tool by scaling the model up by a factor of 100 or 1000 before running Trim and then scaling back down afterward. Or, you could make the block a component instead, use the Dave method to scale a copy of the block and cylinder up, use Trim from Eneroth Solid Tools and delete the large copies when finished.
A third option would be to move the cylinder farther into the block, run Trim and use Push/Pull to pull the face at the bottom of the hole back out to the outer surface of the block.
