I don't think this is a very good idea, DJ. You're putting a 12 volt LED backwards in a 120 volt AC circuit with only a ceramic disc capacitor in series? IMHO you're lucky this is working at all. I would have expected the capacitor, LED, or both to explode as soon as you plugged in the cord. I would stop using this setup if I were you, for the sake of safety. Running LEDs safely off mains voltage requires a lot of additional circuitry that you do not have. I am guessing you missed a major part of the circuit.
Der Strom