My instructions also say 1 1/8" so I know that is too small. I don't think Mopar ever printed a newer version than 03-27-07.
Like Redridge said to be safe measure the grove in the grommet.
I checked my hole saws but I do not remember which one I used, thinking it was 1 3/8" but please measure to make sure.
Grant & Pat
2014 Adventurer 35P
2012 Jeep Wrangler Rubicon