[dad911]

Originally Posted by ben parrish

Wafer LED's are the answer...thin profile and you can seal them up.

https://www.1000bulbs.com/product/201629/LITH-0347.html?gclid=Cj0KCQiAhKviBRCNARIsAAGZ7Cf8XeCeqL qLPWztDN4fx1BgLcrpj6olWZr4-chI0g_yIygFwiwwLtAaArz5EALw_wcB

I've used a lot of these, but the cheaper ones from Amazon. Retrofit, 1/2" thick, just need enough room above the sheetrock for a transformer. Worked great when we had a concrete floor/ceiling, I built an 1-1/2" drop with metal studs and there was enough room for these.

But for the OP, I'd likely use IC airtight cans and caulk them to the sheetrock.